Federal Workforce Flexibility Act of 2004
PL 108-411 (S.129), enacted 10/30/2004

118 STAT. 2305
PUBLIC LAW 108–411—OCT. 30, 2004
Public Law 108–411
108th Congress
An Act
To provide for reform relating to Federal employment, and for other purposes.
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Federal
Workforce Flexibility Act of 2004’’.
(b) TABLE OF CONTENTS.—The table of contents of this Act
is as follows:
Sec. 1. Short title; table of contents.
TITLE I—REFORMS RELATING TO FEDERAL HUMAN CAPITAL
MANAGEMENT
Sec. 101. Recruitment, relocation, and retention bonuses.
Sec. 102. Streamlined critical pay authority.
TITLE II—REFORMS RELATING TO FEDERAL EMPLOYEE CAREER
DEVELOPMENT AND BENEFITS
Sec. 201. Agency training.
Sec. 202. Annual leave enhancements.
Sec. 203. Compensatory time off for travel.
TITLE III—PROVISIONS RELATING TO PAY ADMINISTRATION
Sec. 301. Corrections relating to pay administration.
Sec. 302. Technical corrections.
TITLE I—REFORMS RELATING TO FED-
ERAL HUMAN CAPITAL MANAGEMENT
SEC. 101. RECRUITMENT, RELOCATION, AND RETENTION BONUSES.
(a) BONUSES.—
(1) IN GENERAL.—Chapter 57 of title 5, United States Code,
is amended by striking sections 5753 and 5754 and inserting
the following:
‘‘§ 5753. Recruitment and relocation bonuses
‘‘(a)(1) This section may be applied to—
‘‘(A) employees covered by the General Schedule pay system
established under subchapter III of chapter 53; and
‘‘(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an Execu-
tive agency.
‘‘(2) A bonus may not be paid under this section to an individual
who is appointed to or who holds—
5 USC 101 note.
Federal
Workforce
Flexibility Act of
2004.
Oct. 30, 2004
[S. 129]
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118 STAT. 2306
PUBLIC LAW 108–411—OCT. 30, 2004
‘‘(A) a position to which an individual is appointed by
the President, by and with the advice and consent of the Senate;
‘‘(B) a position in the Senior Executive Service as a non-
career appointee (as such term is defined under section 3132(a));
or
‘‘(C) a position which has been excepted from the competi-
tive service by reason of its confidential, policy-determining,
policy-making, or policy-advocating character.
‘‘(3) In this section, the term ‘employee’ has the meaning given
that term in section 2105, except that such term also includes
an employee described in subsection (c) of that section.
‘‘(b) The Office of Personnel Management may authorize the
head of an agency to pay a bonus under this section to an individual
only if—
‘‘(1) the position to which such individual is appointed
(as described in paragraph (2)(A)) or to which such individual
moves or must relocate (as described in paragraph (2)(B)) is
likely to be difficult to fill in the absence of such a bonus;
and
‘‘(2) the individual—
‘‘(A) is newly appointed as an employee of the Federal
Government; or
‘‘(B)(i) is currently employed by the Federal Govern-
ment; and
‘‘(ii)(I) moves to a new position in the same geographic
area under circumstances described in regulations of the
Office; or
‘‘(II) must relocate to accept a position in a different
geographic area.
‘‘(c)(1) Payment of a bonus under this section shall be contingent
upon the employee entering into a written service agreement to
complete a period of employment with the agency, not longer than
4 years. The Office may, by regulation, prescribe a minimum service
period for purposes of this section.
‘‘(2)(A) The agreement shall include—
‘‘(i) the commencement and termination dates of the
required service period (or provisions for the determination
thereof);
‘‘(ii) the amount of the bonus;
‘‘(iii) the method of payment; and
‘‘(iv) other terms and conditions under which the bonus
is payable, subject to the requirements of this section and
regulations of the Office.
‘‘(B) The terms and conditions for paying a bonus, as specified
in the service agreement, shall include—
‘‘(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has been com-
pleted; and
‘‘(ii) the effect of the termination.
‘‘(C) The required service period shall commence upon the
commencement of service with the agency or movement to a new
position or geographic area, as applicable, unless the service agree-
ment provides for a later commencement date in circumstances
and to the extent allowable under regulations of the Office, such
as when there is an initial period of formal basic training.
‘‘(d)(1) Except as provided in subsection (e), a bonus under
this section shall not exceed 25 percent of the annual rate of
Contracts.
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118 STAT. 2307
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basic pay of the employee at the beginning of the service period
multiplied by the number of years (including a fractional part
of a year, as determined under regulations of the Office) in the
required service period of the employee involved.
‘‘(2) A bonus under this section may be paid as an initial
lump sum, in installments, as a final lump sum upon the completion
of the full period of service required by the agreement, or in a
combination of these forms of payment.
‘‘(3) A bonus under this section is not part of the basic pay
of an employee for any purpose.
‘‘(4) Under regulations of the Office, a recruitment bonus under
this section may be paid to an eligible individual before that indi-
vidual enters on duty.
‘‘(e) The Office may authorize the head of an agency to waive
the limitation under subsection (d)(1) based on a critical agency
need, subject to regulations prescribed by the Office. Under such
a waiver, the maximum bonus allowable shall—
‘‘(1) be equal to the maximum that would be determined
if subsection (d)(1) were applied by substituting ‘50’ for ‘25’;
but
‘‘(2) in no event exceed 100 percent of the annual rate
of basic pay of the employee at the beginning of the service
period.
Nothing in this subsection shall be considered to permit the waiver
of any requirement under subsection (c).
‘‘(f) The Office shall require that an agency establish a plan
for the payment of recruitment bonuses before paying any such
bonuses, and a plan for the payment of relocation bonuses before
paying any such bonuses, subject to regulations prescribed by the
Office.
‘‘(g) The Office may prescribe regulations to carry out this
section, including regulations relating to the repayment of a bonus
under this section in appropriate circumstances when the agreed-
upon service period has not been completed.
‘‘§ 5754. Retention bonuses
‘‘(a)(1) This section may be applied to—
‘‘(A) employees covered by the General Schedule pay system
established under subchapter III of chapter 53; and
‘‘(B) employees in a category approved by the Office of
Personnel Management at the request of the head of an Execu-
tive agency.
‘‘(2) A bonus may not be paid under this section to an individual
who is appointed to or who holds—
‘‘(A) a position to which an individual is appointed by
the President, by and with the advice and consent of the Senate;
‘‘(B) a position in the Senior Executive Service as a non-
career appointee (as such term is defined under section 3132(a));
or
‘‘(C) a position which has been excepted from the competi-
tive service by reason of its confidential, policy-determining,
policy-making, or policy-advocating character.
‘‘(3) In this section, the term ‘employee’ has the meaning given
that term in section 2105, except that such term also includes
an employee described in subsection (c) of that section.
‘‘(b) The Office of Personnel Management may authorize the
head of an agency to pay a retention bonus to an employee if—
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118 STAT. 2308
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‘‘(1) the unusually high or unique qualifications of the
employee or a special need of the agency for the employee’s
services makes it essential to retain the employee; and
‘‘(2) the agency determines that, in the absence of a reten-
tion bonus, the employee would be likely to leave—
‘‘(A) the Federal service; or
‘‘(B) for a different position in the Federal service under
conditions described in regulations of the Office.
‘‘(c) The Office may authorize the head of an agency to pay
retention bonuses to a group of employees in 1 or more categories
of positions in 1 or more geographic areas, subject to the require-
ments of subsection (b)(1) and regulations prescribed by the Office,
if there is a high risk that a significant portion of employees
in the group would be likely to leave in the absence of retention
bonuses.
‘‘(d)(1) Payment of a retention bonus is contingent upon the
employee entering into a written service agreement with the agency
to complete a period of employment with the agency.
‘‘(2)(A) The agreement shall include—
‘‘(i) the length of the required service period;
‘‘(ii) the amount of the bonus;
‘‘(iii) the method of payment; and
‘‘(iv) other terms and conditions under which the bonus
is payable, subject to the requirements of this section and
regulations of the Office.
‘‘(B) The terms and conditions for paying a bonus, as specified
in the service agreement, shall include—
‘‘(i) the conditions under which the agreement may be
terminated before the agreed-upon service period has been com-
pleted; and
‘‘(ii) the effect of the termination.
‘‘(3)(A) Notwithstanding paragraph (1), a written service agree-
ment is not required if the agency pays a retention bonus in
biweekly installments and sets the installment payment at the
full bonus percentage rate established for the employee with no
portion of the bonus deferred.
‘‘(B) If an agency pays a retention bonus in accordance with
subparagraph (A) and makes a determination to terminate the
payments, the agency shall provide written notice to the employee
of that determination. Except as provided in regulations of the
Office, the employee shall continue to be paid the retention bonus
through the end of the pay period in which such written notice
is provided.
‘‘(4) A retention bonus for an employee may not be based
on any period of such service which is the basis for a recruitment
or relocation bonus under section 5753.
‘‘(e)(1) Except as provided in subsection (f), a retention bonus,
which shall be stated as a percentage of the employee’s basic
pay for the service period associated with the bonus, may not
exceed—
‘‘(A) 25 percent of the employee’s basic pay if paid under
subsection (b); or
‘‘(B) 10 percent of an employee’s basic pay if paid under
subsection (c).
‘‘(2)(A) A retention bonus may be paid to an employee in install-
ments after completion of specified periods of service or in a single
Notices.
Contracts.
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118 STAT. 2309
PUBLIC LAW 108–411—OCT. 30, 2004
lump sum at the end of the full period of service required by
the agreement.
‘‘(B) An installment payment is derived by multiplying the
amount of basic pay earned in the installment period by a percent-
age not to exceed the bonus percentage rate established for the
employee.
‘‘(C) If the installment payment percentage established for the
employee is less than the bonus percentage rate established for
the employee, the accrued but unpaid portion of the bonus is payable
as part of the final installment payment to the employee after
completion of the full service period under the terms of the service
agreement.
‘‘(D) For purposes of this paragraph, the bonus percentage
rate established for an employee means the bonus percentage rate
established for such employee in accordance with paragraph (1)
or subsection (f), as the case may be.
‘‘(3) A retention bonus is not part of the basic pay of an
employee for any purpose.
‘‘(f) Upon the request of the head of an agency, the Office
may waive the limit established under subsection (e)(1) and permit
the agency head to pay an otherwise eligible employee or category
of employees retention bonuses of up to 50 percent of basic pay,
based on a critical agency need.
‘‘(g) The Office shall require that, before paying any bonuses
under this section, an agency shall establish a plan for the payment
of any such bonuses, subject to regulations prescribed by the Office.
‘‘(h) The Office may prescribe regulations to carry out this
section.’’.
(2) CLERICAL
AMENDMENT.—The table of sections for
chapter 57 of title 5, United States Code, is amended by striking
the item relating to section 5754 and inserting the following:
‘‘5754. Retention bonuses.’’.
(3) SENSE OF CONGRESS.—It is the sense of the Congress
that the Director of the Office of Personnel Management—
(A) should, each time a bonus is paid under the amend-
ment made by paragraph (1) to recruit or relocate a Federal
employee from one Government agency to another within
the same geographic area or to retain a Federal employee
who might otherwise leave one Government agency for
another within the same geographic area, be notified of
that payment within 60 days after the date on which
such bonus is paid; and
(B) should monitor the payment of such bonuses (in
the circumstances described in subparagraph (A)) to ensure
that they are an effective use of the Federal Government’s
funds and have not adversely affected the ability of those
Government agencies that lost employees to other Govern-
ment agencies (in such circumstances) to carry out their
mission.
(b) RELOCATION
PAYMENTS.—Section 407 of the Federal
Employees Pay Comparability Act of 1990 (5 U.S.C. 5305 note;
104 Stat. 1467) is repealed.
(c) REPORTS.—
(1) RECRUITMENT AND RELOCATION BONUSES.—
(A) IN GENERAL.—The Office of Personnel Management
shall submit to the Committee on Governmental Affairs
of the Senate and the Committee on Government Reform
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118 STAT. 2310
PUBLIC LAW 108–411—OCT. 30, 2004
of the House of Representatives annually, for each of the
first 5 years during which section 5753 of title 5, United
States Code (as amended by subsection (a)(1)) is in effect,
a report on the operation of such section.
(B) CONTENTS.—Each report submitted under this
paragraph shall include, with respect to the period covered
by such report, a description of how the authority to pay
bonuses under the section of title 5, United States Code,
referred to in subparagraph (A) was used by the respective
agencies, including, with respect to each such agency and
each type of bonus under such section—
(i) the number and dollar-amount of bonuses
paid—
(I) to individuals holding positions within each
pay grade, pay level, or other pay classification;
and
(II) if applicable, to individuals who moved
between positions that were in different agencies
but the same geographic area (including the names
of the agencies involved); and
(ii) a determination of the extent to which such
bonuses furthered the purposes of such section.
(2) RETENTION BONUSES.—
(A) IN GENERAL.—The Office of Personnel Management
shall submit to the Committee on Governmental Affairs
of the Senate and the Committee on Government Reform
of the House of Representatives annually, for each of the
first 5 years during which section 5754 of title 5, United
States Code (as amended by subsection (a)(1)) is in effect,
a report on the operation of such section.
(B) CONTENTS.—Each report submitted under this
paragraph shall include, with respect to the period covered
by such report, a description of how the authority to pay
bonuses under the section of title 5, United States Code,
referred to in subparagraph (A) was used by the respective
agencies, including, with respect to each such agency—
(i) the number and dollar-amount of bonuses
paid—
(I) to individuals holding positions within each
pay grade, pay level, or other pay classification;
and
(II) if applicable, to prevent individuals from
moving between positions that were in different
agencies but the same geographic area (including
the names of the agencies involved); and
(ii) a determination of the extent to which such
bonuses furthered the purposes of such section.
(d) EFFECTIVE DATE AND APPLICATION.—
(1) EFFECTIVE DATE.—Except as provided under paragraphs
(2) and (3), this section shall take effect on the first day of
the first applicable pay period beginning on or after the 180th
day after the date of the enactment of this Act.
(2) APPLICATION TO AGREEMENTS.—A recruitment or reloca-
tion bonus service agreement that was authorized under section
5753 of title 5, United States Code, before the effective date
under paragraph (1) shall continue, until its expiration, to
5 USC 5753 note.
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118 STAT. 2311
PUBLIC LAW 108–411—OCT. 30, 2004
be subject to such section as in effect on the day before such
effective date.
(3) APPLICATION TO ALLOWANCES.—Payment of a retention
allowance that was authorized under section 5754 of title 5,
United States Code, before the effective date under paragraph
(1) shall continue, subject to such section as in effect on the
day before such effective date, until the retention allowance
is reauthorized or terminated (but no longer than 1 year after
such effective date).
SEC. 102. STREAMLINED CRITICAL PAY AUTHORITY.
Section 5377 of title 5, United States Code, is amended—
(1) by striking ‘‘Office of Personnel Management’’ each place
it appears and inserting ‘‘Office of Management and Budget’’;
(2) by striking ‘‘Office of Management and Budget’’ each
place it appears and inserting ‘‘Office of Personnel Manage-
ment’’;
(3) in subsection (g), by striking ‘‘prescribing regulations
under this section or’’; and
(4) in subsection (h), by striking ‘‘Committee on Post Office
and Civil Service’’ and inserting ‘‘Committee on Government
Reform’’.
TITLE II—REFORMS RELATING TO FED-
ERAL EMPLOYEE CAREER DEVELOP-
MENT AND BENEFITS
SEC. 201. AGENCY TRAINING.
(a) TRAINING TO ACCOMPLISH PERFORMANCE PLANS AND STRA-
TEGIC GOALS.—Section 4103 of title 5, United States Code, is
amended by adding at the end the following:
‘‘(c) The head of each agency shall, on a regular basis—
‘‘(1) evaluate each program or plan established, operated,
or maintained under subsection (a) with respect to accom-
plishing specific performance plans and strategic goals in per-
forming the agency mission; and
‘‘(2) modify such program or plan as needed to accomplish
such plans and goals.’’.
(b) SPECIFIC TRAINING PROGRAMS.—
(1) IN GENERAL.—Chapter 41 of title 5, United States Code,
is amended by adding after section 4120 the following:
‘‘§ 4121. Specific training programs
‘‘In consultation with the Office of Personnel Management,
the head of each agency shall establish—
‘‘(1) a comprehensive management succession program to
provide training to employees to develop managers for the
agency; and
‘‘(2) a program to provide training to managers on actions,
options, and strategies a manager may use in—
‘‘(A) relating to employees with unacceptable perform-
ance;
‘‘(B) mentoring employees and improving employee
performance and productivity; and
‘‘(C) conducting employee performance appraisals.’’.
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118 STAT. 2312
PUBLIC LAW 108–411—OCT. 30, 2004
(2) CLERICAL
AMENDMENT.—The table of sections for
chapter 41 of title 5, United States Code, is amended by adding
at the end the following:
‘‘4121. Specific training programs.’’.
SEC. 202. ANNUAL LEAVE ENHANCEMENTS.
(a) CREDITABILITY OF PRIOR NONGOVERNMENTAL SERVICE FOR
PURPOSES OF DETERMINING RATE OF LEAVE ACCRUAL.—
(1) IN GENERAL.—Section 6303 of title 5, United States
Code, is amended by adding at the end the following:
‘‘(e)(1) Not later than 180 days after the date of the enactment
of this subsection, the Office of Personnel Management shall pre-
scribe regulations under which, for purposes of determining years
of service under subsection (a), credit shall, in the case of a newly
appointed employee, be given for any prior service of such employee
that would not otherwise be creditable for such purposes, if—
‘‘(A) such service—
‘‘(i) was performed in a position the duties of which
directly relate to the duties of the position to which
such employee is so appointed; and
‘‘(ii) meets such other requirements as the Office
may prescribe; and
‘‘(B) in the judgment of the head of the appointing agency,
the application of this subsection is necessary in order to
achieve an important agency mission or performance goal.
‘‘(2) Service described in paragraph (1)—
‘‘(A) shall be creditable, for the purposes described in para-
graph (1), as of the effective date of the employee’s appointment;
and
‘‘(B) shall not thereafter cease to be so creditable, unless
the employee fails to complete a full year of continuous service
with the agency.
‘‘(3) An employee shall not be eligible for the application of
paragraph (1) on the basis of any appointment if, within 90 days
before the effective date of such appointment, such employee has
held any position in the civil service.’’.
(2) CONFORMING AMENDMENT.—The second sentence of sec-
tion 6303(a) of title 5, United States Code, is amended by
striking the period and inserting ‘‘, and for all service which
is creditable by virtue of subsection (e).’’.
(b) OTHER ANNUAL LEAVE ENHANCEMENTS.—Section 6303 of
title 5, United States Code, is amended by adding after subsection
(e) (as added by subsection (a)) the following:
‘‘(f) Notwithstanding any other provision of this section, the
rate of accrual of annual leave under subsection (a) shall be 1
day for each full biweekly pay period in the case of any employee
who holds a position which is subject to—
‘‘(1) section 5376 or 5383; or
‘‘(2) a pay system equivalent to either of the foregoing,
as determined by the Office of Personnel Management.’’.
(c) APPLICABILITY.—None of the amendments made by sub-
section (a) shall apply in the case of any employee holding a position
pursuant to an appointment made before the effective date of the
regulations implementing such amendments.
5 USC 6303 note.
Deadline.
Regulations.
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SEC. 203. COMPENSATORY TIME OFF FOR TRAVEL.
(a) IN GENERAL.—Subchapter V of chapter 55 of title 5, United
States Code, is amended by adding at end the following:
‘‘§ 5550b. Compensatory time off for travel
‘‘(a) Notwithstanding section 5542(b)(2), each hour spent by
an employee in travel status away from the official duty station
of the employee, that is not otherwise compensable, shall be treated
as an hour of work or employment for purposes of calculating
compensatory time off.
‘‘(b) An employee who has any hours treated as hours of work
or employment for purposes of calculating compensatory time under
subsection (a), shall not be entitled to payment for any such hours
that are unused as compensatory time.’’.
(b) CLERICAL AMENDMENT.—The table of sections for chapter
55 of title 5, United States Code, is amended by inserting after
the item relating to section 5550a the following:
‘‘5550b. Compensatory time off for travel.’’.
(c) EFFECTIVE DATE.—The amendments made by this section
shall take effect on the earlier of—
(1) the effective date of any regulations prescribed to carry
out such amendments; or
(2) the 90th day after the date of the enactment of this
Act.
TITLE III—PROVISIONS RELATING TO
PAY ADMINISTRATION
SEC. 301. CORRECTIONS RELATING TO PAY ADMINISTRATION.
(a) IN GENERAL.—Chapter 53 of title 5, United States Code,
is amended—
(1) in section 5302, by striking paragraph (8) and inserting
the following:
‘‘(8) the term ‘rates of pay under the General Schedule’,
‘rates of pay for the General Schedule’, or ‘scheduled rates
of basic pay’ means the rates of basic pay under the General
Schedule as established by section 5332, excluding pay under
section 5304 and any other additional pay of any kind; and’’;
(2) in section 5305—
(A) by striking subsection (a) and inserting the fol-
lowing:
‘‘(a)(1) Whenever the Office of Personnel Management finds
that the Government’s recruitment or retention efforts with respect
to 1 or more occupations in 1 or more areas or locations are,
or are likely to become, significantly handicapped due to any of
the circumstances described in subsection (b), the Office may estab-
lish for the areas or locations involved, with respect to individuals
in positions paid under any of the pay systems referred to in
subsection (c), higher minimum rates of pay for 1 or more grades
or levels, occupational groups, series, classes, or subdivisions
thereof, and may make corresponding increases in all rates of
the pay range for each such grade or level. However, a minimum
rate so established may not exceed the maximum rate of basic
pay (excluding any locality-based comparability payment under sec-
tion 5304 or similar provision of law) for the grade or level by
5 USC 5550b
note.
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118 STAT. 2314
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more than 30 percent, and no rate may be established under this
section in excess of the rate of basic pay payable for level IV
of the Executive Schedule. In the case of individuals not subject
to the provisions of this title governing appointment in the competi-
tive service, the President may designate another agency to
authorize special rates under this section.
‘‘(2) The head of an agency may determine that a category
of employees of the agency will not be covered by a special rate
authorization established under this section. The head of an agency
shall provide written notice to the Office of Personnel Management
(or other agency designated by the President to authorize special
rates under the last sentence of paragraph (1)) which identifies
the specific category or categories of employees that will not be
covered by special rates authorized under this section. If the head
of an agency removes a category of employees from coverage under
a special rate authorization after that authorization takes effect,
the loss of coverage will take effect on the first day of the first
pay period after the date of the notice.’’;
(B) in subsection (b), by striking paragraph (4) and
inserting the following:
‘‘(4) any other circumstances which the Office of Personnel
Management (or such other agency as the President may under
the last sentence of subsection (a)(1) designate) considers appro-
priate.’’;
(C) in subsection (d)—
(i) by striking ‘‘President’’ and inserting ‘‘Office
of Personnel Management’’; and
(ii) by striking ‘‘or by such agency as he may
designate’’ and inserting ‘‘(or by such other agency
as the President may designate under the last sentence
of subsection (a)(1))’’;
(D) in subsection (e), by striking ‘‘basic pay’’ and
inserting ‘‘pay’’;
(E) by striking subsection (f) and inserting the fol-
lowing:
‘‘(f) When a schedule of special rates established under this
section is adjusted under subsection (d), a covered employee’s special
rate will be adjusted in accordance with conversion rules prescribed
by the Office of Personnel Management (or by such other agency
as the President may under the last sentence of subsection (a)(1)
designate).’’;
(F) in subsection (g)(1)—
(i) by striking ‘‘basic pay’’ and inserting ‘‘pay’’;
and
(ii) by striking ‘‘President (or his designated
agency)’’ and inserting ‘‘Office of Personnel Manage-
ment (or such other agency as the President may under
the last sentence of subsection (a)(1) designate)’’;
(G) by striking subsection (h) and inserting the fol-
lowing:
‘‘(h) An employee shall not for any purpose be considered to
be entitled to a rate of pay established under this section with
respect to any period for which such employee is entitled to a
higher rate of basic pay under any other provision of law. For
purposes of this subsection, the term ‘basic pay’ includes any
applicable locality-based comparability payment under section 5304
or similar provision of law.’’; and
Effective date.
Notification.
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(H) by adding at the end the following:
‘‘(i) If an employee who is receiving a rate of pay under this
section becomes subject, by virtue of moving to a new official duty
station, to a different pay schedule, such employee’s new rate of
pay shall be initially established under conversion rules prescribed
by the Office of Personnel Management (or such other agency
as the President may under the last sentence of subsection (a)(1)
designate) in conformance with the following:
‘‘(1) First, determine the rate of pay to which such employee
would be entitled at the new official duty station based on
such employee’s position, grade, and step (or relative position
in the rate range) before the move.
‘‘(2) Then, if (in addition to the change in pay schedule)
the move also involves any personnel action or other change
requiring a rate adjustment under any other provision of law,
rule, or regulation, apply the applicable rate adjustment provi-
sions, treating the rate determined under paragraph (1) as
if it were the rate last received by the employee before the
rate adjustment.
‘‘(j) A rate determined under a schedule of special rates estab-
lished under this section shall be considered to be part of basic
pay for purposes of subchapter III of chapter 83, chapter 84, chapter
87, subchapter V of chapter 55, and section 5941, and for such
other purposes as may be expressly provided for by law or as
the Office of Personnel Management may by regulation prescribe.’’;
(3) in section 5334—
(A) in subsection (b), by adding at the end the following:
‘‘If an employee’s rate after promotion or transfer is greater than
the maximum rate of basic pay for the employee’s grade, that
rate shall be treated as a retained rate under section 5363. The
Office of Personnel Management shall prescribe by regulation the
circumstances under which and the extent to which special rates
under section 5305 (or similar provision of law) or locality-adjusted
rates under section 5304 (or similar provision of law) are considered
to be basic pay in applying this subsection.’’; and
(B) by adding at the end the following:
‘‘(g) In the case of an employee who—
‘‘(1) moves to a new official duty station, and
‘‘(2) by virtue of such move, becomes subject to a different
pay schedule,
any rate adjustment under the preceding provisions of this section,
with respect to such employee in connection with such move, shall
be made—
‘‘(A) first, by determining the rate of pay to which such
employee would be entitled at the new official duty station
based on such employee’s position, grade, and step (or relative
position in the rate range) before the move, and
‘‘(B) then, by applying the provisions of this section that
would otherwise apply (if any), treating the rate determined
under subparagraph (A) as if it were the rate last received
by the employee before the rate adjustment.’’;
(4) in section 5361—
(A) by amending paragraph (4) to read as follows:
‘‘(4) ‘rate of basic pay’ means—
‘‘(A) the rate of basic pay payable to an employee
under law or regulations before any deductions or additions
of any kind, but including—
Regulations.
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118 STAT. 2316
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‘‘(i) any applicable locality-based comparability
payment under section 5304 or similar provision of
law;
‘‘(ii) any applicable special pay under section 5305
or similar provision of law; and
‘‘(iii) subject to such regulations as the Office of
Personnel Management may prescribe, any applicable
existing retained rate of pay established under section
5363 or similar provision of law; and
‘‘(B) in the case of a prevailing rate employee, the
scheduled rate of pay determined under section 5343;’’;
(B) in paragraph (6), by striking ‘‘and’’ at the end;
(C) in paragraph (7), by striking the period and
inserting ‘‘; and’’; and
(D) by adding at the end the following:
‘‘(8) ‘retained rate’ means the rate of basic pay to which
an employee is entitled under section 5363(b)(2).’’;
(5) in section 5363—
(A) in subsection (a), by striking the matter following
paragraph (4) and inserting the following:
‘‘is entitled to a rate of basic pay in accordance with regulations
prescribed by the Office of Personnel Management in conformity
with the provisions of this section.’’; and
(B) by striking subsections (b) and (c) and inserting
the following:
‘‘(b)(1)(A) If, as a result of any event described in subsection
(a), the employee’s former rate of basic pay is less than or equal
to the maximum rate of basic pay payable for the grade of the
employee’s position immediately after the occurrence of the event
involved, the employee is entitled to basic pay at the lowest rate
of basic pay payable for such grade that equals or exceeds such
former rate of basic pay.
‘‘(B) This section shall cease to apply to an employee to whom
subparagraph (A) applies once the appropriate rate of basic pay
has been determined for such employee under this paragraph.
‘‘(2)(A) If, as a result of any event described in subsection
(a), the employee’s former rate of basic pay is greater than the
maximum rate of basic pay payable for the grade of the employee’s
position immediately after the occurrence of the event involved,
the employee is entitled to basic pay at a rate equal to the lesser
of—
‘‘(i) the employee’s former rate of basic pay; or
‘‘(ii) 150 percent of the maximum rate of basic pay payable
for the grade of the employee’s position immediately after the
occurrence of the event involved,
as adjusted by subparagraph (B).
‘‘(B) A rate to which an employee is entitled under this para-
graph shall be increased at the time of any increase in the maximum
rate of basic pay payable for the grade of the employee’s position
by 50 percent of the dollar amount of each such increase.
‘‘(3) For purposes of this subsection, the term ‘former rate
of basic pay’, as used with respect to an employee in connection
with an event described in subsection (a), means the rate of basic
pay last received by such employee before the occurrence of such
event.
‘‘(c)(1) Notwithstanding any other provision of this section, in
the case of an employee who—
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118 STAT. 2317
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‘‘(A) moves to a new official duty station, and
‘‘(B) in conjunction with such move, becomes subject to
both a different pay schedule and (disregarding this subsection)
the preceding provisions of this section,
this section shall be applied—
‘‘(i) first, by determining the rate of pay to which such
employee would be entitled at the new official duty station
based on such employee’s position, grade, and step (or relative
position in the pay range) before the move, and
‘‘(ii) then, by applying the provisions of this section that
would apply (if any), treating the rate determined under clause
(i) as if it were the rate last received by the employee before
the application of this section.
‘‘(2) A reduction in an employee’s rate of basic pay resulting
from a determination under paragraph (1)(ii) is not a basis for
an entitlement under this section.
‘‘(3) The rate of basic pay for an employee who is receiving
a retained rate at the time of moving to a new official duty station
at which different pay schedules apply shall be subject to regula-
tions prescribed by the Office of Personnel Management consistent
with the purposes of this section.
‘‘(d) A retained rate shall be considered part of basic pay for
purposes of this subchapter and for purposes of subchapter III
of chapter 83, chapters 84 and 87, subchapter V of chapter 55,
section 5941, and for such other purposes as may be expressly
provided for by law or as the Office of Personnel Management
may by regulation prescribe. The Office shall, for any purpose
other than any of the purposes referred to in the preceding sentence,
prescribe by regulation what constitutes basic pay for employees
receiving a retained rate.
‘‘(e) This section shall not apply, or shall cease to apply, to
an employee who—
‘‘(1) has a break in service of 1 workday or more;
‘‘(2) is entitled, by operation of this subchapter, chapter
51 or 53, or any other provision of law, to a rate of basic
pay which is equal to or higher than, or declines a reasonable
offer of a position the rate of basic pay for which is equal
to or higher than, the retained rate to which the employee
would otherwise be entitled; or
‘‘(3) is demoted for personal cause or at the employee’s
request.’’; and
(6) in section 5365(b), by inserting after ‘‘provisions of
this subchapter’’ the following: ‘‘(subject to any conditions or
limitations the Office may establish)’’.
(b) SPECIAL RATES FOR LAW ENFORCEMENT OFFICERS.—Section
403(c) of the Federal Employees Pay Comparability Act of 1990
(5 U.S.C. 5305 note) is amended by striking all after ‘‘provision
of law)’’ and inserting ‘‘and shall be basic pay for all purposes.
The rates shall be adjusted at the time of adjustments in the
General Schedule to maintain the step linkage set forth in sub-
section (b)(2).’’.
(c) REPEAL.—Section 4505a(a)(2) of title 5, United States Code,
is amended—
(1) by striking ‘‘(2)(A)’’ and inserting ‘‘(2)’’; and
(2) by striking subparagraph (B).
(d) EFFECTIVE DATE; CONVERSION RULES.—
5 USC 5363 note.
Regulations.
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118 STAT. 2318
PUBLIC LAW 108–411—OCT. 30, 2004
(1) EFFECTIVE DATE.—This section shall take effect on the
first day of the first applicable pay period beginning on or
after the 180th day after the date of the enactment of this
Act.
(2) CONVERSION RULES.—
(A) INDIVIDUALS RECEIVING A RETAINED RATE OR A RATE
GREATER THAN THE MAXIMUM RATE FOR THE GRADE.—Sub-
ject to any regulations the Office of Personnel Management
may prescribe, an employee under a covered pay schedule
who, on the day before the effective date of this section,
is receiving a retained rate under section 5363 of title
5, United States Code, or is receiving under similar
authority a rate of basic pay that is greater than the
maximum rate of basic pay payable for the grade of the
employee’s position shall have that rate converted as of
the effective date of this section, and the employee shall
be considered to be receiving a retained rate under section
5363 of such title (as amended by this section). The newly
applicable retained rate shall equal the formerly applicable
retained rate as adjusted to include any applicable locality-
based payment under section 5304 of title 5, United States
Code, or similar provision of law.
(B) DEFINITION.—For purposes of this paragraph, the
term ‘‘covered pay schedule’’ has the meaning given such
term by section 5361 of title 5, United States Code.
SEC. 302. TECHNICAL CORRECTIONS.
(a)(1) Section 5304 of title 5, United States Code, as amended
by section 1125 of the National Defense Authorization Act for
Fiscal Year 2004 (Public Law 108–136), is amended—
(A) in subsection (g)(2)(A), by striking ‘‘(A)–(D)’’ and
inserting ‘‘(A)–(C)’’; and
(B) in subsection (h)(2)(B)(i), by striking ‘‘or (vii)’’ and
inserting ‘‘or (vi)’’.
(2) The amendments made by this subsection shall take effect
as if included in the enactment of the National Defense Authoriza-
tion Act for Fiscal Year 2004 (Public Law 108–136).
Effective date.
5 USC 5304 note.
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118 STAT. 2319
PUBLIC LAW 108–411—OCT. 30, 2004
LEGISLATIVE HISTORY—S. 129:
HOUSE REPORTS: No. 108–733 (Comm. on Government Reform).
SENATE REPORTS: No. 108–223 (Comm. on Governmental Affairs).
CONGRESSIONAL RECORD, Vol. 150 (2004):
Apr. 8, considered and passed Senate.
Oct. 6, considered and passed House, amended.
Oct. 11, Senate concurred in House amendment.
(b) Section 5314 of title 5, United States Code, is amended
by adding at the end the following:
‘‘Administrator of the Office of Electronic Government.’’.
Approved October 30, 2004.
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