Pay Administration (General); Hazard Pay Differentials

SUMMARY: The Office of Personnel Management (OPM) is issuing final

regulations on the hazardous duty pay differential program for General

Schedule employees, as amended by the Federal Employees Pay

Comparability Act of 1990 (FEPCA). The final rule delegates authority

to agencies to authorize payment of a differential to an employee when

the hazardous duty has been taken into account in the classification of

his or her position, clarifies when a hazard has been taken into

account in the classification of a position, and clarifies the

circumstances under which a hazard pay differential may be terminated.

EFFECTIVE DATE: The final rule is effective on July 29, 1994.

FOR FURTHER INFORMATION CONTACT:Frank Hong, (202) 606-2858.

SUPPLEMENTARY INFORMATION: On May 3, 1991, (56 FR 20343) the Office of

Personnel Management (OPM) published interim regulations to implement

section 203 of the Federal Employees Pay Comparability Act of 1990

(FEPCA), Public Law 101-509, November 5, 1990. Section 203 amended

section 5545(d) of title 5, United States Code, which contains the

legal basis for paying General Schedule employees a differential for

duty involving unusual physical hardship or hazard.

The 60-day comment period ended on July 1, 1991. An employees'

professional association commented favorably on the FEPCA changes in

general. Other more specific comments were received from five Federal

agencies, one labor organization, and three individuals. Following are

summarized comments and revisions in the interim regulations.

Delegation of Authority

In response to draft interim regulations, two agencies recommended

that OPM delegate authority to agencies to authorize payment of a

hazardous duty pay (HDP) differential to an employee even though the

hazardous duty has been taken into account in the classification of his

or her position. As part of our effort to delegate decisionmaking

authority to Federal managers and supervisors where appropriate, OPM

has decided to delegate authority to agencies to authorize payment of

an HDP differential under these circumstances for the following

reasons.

First, agencies have direct and detailed knowledge of their

workplaces, occupations, positions, job duties, and possible safety

measures to reduce hazards to less than significant levels. Second,

agencies currently have responsibility to apply the existing HDP

categories to their own workplace situations, determine whether the

work duty is covered by a particular HDP category, and decide whether

the differential may (or may not) be paid to the employee based on the

classification of his or her position. Third, the exercise of this

responsibility requires the same expertise in the classification

aspects of the HDP program as the evaluation of the qualifying

conditions requires.

OPM has specified two conditions in Sec. 550.904(b) that must exist

before payment of an HDP differential may be approved by an agency:

(1) The actual circumstances of the specific hazard or physical

hardship have changed from that taken into account and described in the

position description; and

(2) Using the knowledge, skills, and abilities that are described

in the position description, the employee cannot control the hazard or

physical hardship; thus, the risk is not reduced to a less than

significant level.

The qualifying conditions for payment of a differential may be

present even though the hazardous duty may be performed with

considerable frequency. When the two conditions are met, payment for

the hazardous duty would be authorized (provided other regulatory

requirements are met). The final regulations also include certain

minimal recordkeeping and reporting requirements related to the

delegation of this authority.

Hazardous Duty and Classification of the Position

In most situations, payment of a differential is prohibited when

the hazardous duty has been taken into account in the classification of

the employee's position. The interim regulations added the phrase

``without regard to whether the hazardous duty or physical hardship is

grade controlling, unless a waiver has been approved by OPM.'' Three

agencies and two individuals believed that the differential should be

payable unless the hazardous duty serves as the primary basis for grade

level in the classification process. Adopting this recommendation would

overturn OPM's long-standing interpretation of the statutory phrase

``the classification of which takes into account.''

The commenters provided the following example. When a hazard is

recognized in Factor Evaluation System (FES) factors 8, physical

demands, and/or 9, work environment, the hazard is a factor considered

in establishing the grade of the position. In this example, the

commenters noted, the hazard typically has a limited effect on the

overall classification of the position and usually does not increase

the grade level of the position.

However, OPM notes that limited consideration of a hazardous duty

in FES factors 8 and/or 9 may be appropriate where the hazard is at a

low level. Moreover, factors 8 and/or 9 may not describe in great

detail how a hazard relates to the whole position. Furthermore, in some

cases, a hazardous duty may be considered in the narrative standard for

the occupation and may be the same for all job levels, and, therefore,

may not require further consideration in the classification of the

position. In other cases, a hazardous duty may be classified by analogy

to an existing described and classified hazard and documented

accordingly in the evaluation statement.

Nevertheless, the FES example illustrates some of the difficulties

with the classification process in regard to the HDP program.

Eligibility for payment of a differential is no longer restricted to

the performance of an irregular or intermittent hazardous duty.

Therefore, the determination that payment of a differential is not

warranted depends on the classification of the position (provided that

the agency involved has determined that the hazardous work situation

involved does match one of the categories in appendix A).

In OPM's view, a hazardous duty is taken into account in the

classification of a position when the duty is a part of the knowledge,

skills, and abilities required of the incumbent of the position. In

other words, the incumbent of the position is able to influence the

hazardous duty--i.e., exercise knowledge, skill, and ability to reduce

the risk of the hazard. Therefore, OPM has clarified Sec. 550.904(c) by

adding the following phrase: ``that is, the knowledge, skills, and

abilities required to perform that duty are considered in the

classification of the position.''

Termination of a Differential

The labor organization requested that a differential not be

discontinued when the hazard has been reduced to a negligible level or

the physical discomfort or distress has been adequately alleviated, but

that the differential be discontinued only when the hazard or hardship

is completely eliminated. OPM cannot make such a change because the

statute authorizes payment of a differential for duty involving unusual

physical hardship or hazard, but not for negligible hazard or

adequately alleviated discomfort or distress.

An agency requested that OPM clarify the term ``negligible level''

used in Sec. 550.906(b) of the interim regulations to describe the

level of risk at which the differential shall be discontinued. The

agency requested that the HDP regulations incorporate terms used in the

Occupational Safety and Health Administration's (OSHA's) health

standards or other generally accepted standards that are required in

the workplace. By law, Federal agencies are required to follow OSHA

safety and health standards in order to protect employees from a

significant risk of material health or functional impairment that may

be experienced because of hazard in the workplace.

OPM agrees that the term ``negligible level'' should be clarified

by substituting a term closely related to the term ``significant risk''

used in the OSHA standards. Therefore, the final rule has been amended

to provide that hazard pay shall be discontinued when ``[s]afety

precautions have reduced the element of hazard to a less than

significant level of risk, consistent with generally accepted standards

that may be applicable, such as those published by the Occupational

Safety and Health Administration, Department of Labor.'' This change in

regulatory language is intended to clarify rather than change the

meaning of the regulations.

Miscellaneous Comments

Concerning the establishment of hazard pay differentials, the labor

organization requested that employees and their representatives be

provided with standing to request amendments to part 550, subpart I,

appendix A--Schedule of Pay Differentials Authorized for Hazardous

Duty. Since an individual or organization may request that OPM

establish a new differential on OPM's own motion, it is not necessary

to amend the regulations to accomplish this objective.

The labor organization and one individual requested that employees

and their representatives be provided with standing to request payment

of a differential in unusual situations when the hazard has been taken

into account in classification. No changes in the regulations are

needed. An individual or organization may request that an agency

consider such action.

One agency and the labor organization objected to the requirement

in Sec. 550.903(b)(5) that an agency include an estimate of annual cost

with a request for an additional category under appendix A. The agency

believed that preparation of the estimate would delay the request for

no apparent value. The labor organization believed that consideration

of cost is not authorized by the law and that the requirement for such

an estimate is arbitrary and an abuse of administrative discretion. OPM

is retaining this provision because the information is needed to

evaluate the cost of the HDP program.

One agency requested that a study be conducted of non-Federal pay

practices to determine how inconsistencies between the separate Federal

programs for General Schedule and prevailing rate employees could be

eliminated. OPM recognizes that significant disparities exist between

these programs and will attempt to address these disparities as its

resources permit. However, such a study is not required prior to the

issuance of final rules governing the program changes made by FEPCA.

Two individuals questioned the way the phrase ``irregular or

intermittent'' was defined in the past in the HDP program and

maintained that the use of the correct dictionary definitions would

have made it unnecessary to delete this phrase. OPM believes the

statute as amended by FEPCA removes any possible ambiguity attributable

to this phrase in the previous statute.

Regulatory Flexibility Act

I certify that these regulations will not have a significant

economic impact on a substantial number of small entities because they

apply only to Federal agencies and employees.

List of Subjects in 5 CFR Part 550

Administrative practice and procedure, Claims, Government

employees, Wages.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, the interim rule published at 56 FR 20343 on May 3,

1991, amending 5 CFR part 550, is adopted as a final rule with the

following changes:

PART 550--PAY ADMINISTRATION (GENERAL)

Subpart I--Pay for Duty Involving Physical Hardship or Hazard

1. The authority citation for subpart I continues to read as

follows:

Authority: 5 U.S.C. 5545(d), 5548(b).

2. In Sec. 550.902, a definition of head of an agency is added in

alphabetical order to read as follows:

Sec. 550.902 Definitions.

* * * * *

Head of an agency means the head of an agency or an official who

has been delegated the authority to act for the head of the agency in

the matter concerned.

3. Section 550.904 is revised to read as follows:

Sec. 550.904 Authorization of hazard pay differential.

(a) An agency shall pay the hazard pay differential listed in

appendix A of this subpart to an employee who is assigned to and

performs any duty specified in appendix A of this subpart. However,

hazard pay differential may not be paid to an employee when the

hazardous duty or physical hardship has been taken into account in the

classification of his or her position, without regard to whether the

hazardous duty or physical hardship is grade controlling, unless

payment of a differential has been approved under paragraph (b) of this

section.

(b) The head of an agency may approve payment of a hazard pay

differential when--

(1) The actual circumstances of the specific hazard or physical

hardship have changed from that taken into account and described in the

position description; and

(2) Usi.ng the knowledge, skills, and abilities that are described

in the position description, the employee cannot control the hazard or

physical hardship; thus, the risk is not reduced to a less than

significant level.

(c) For the purpose of this section, the phrase ``has been taken

into account in the classification of his or her position'' means that

the duty constitutes an element considered in establishing the grade of

the position--i.e., the knowledge, skills, and abilities required to

perform that duty are considered in the classification of the position.

(d) The head of the agency shall maintain records on the use of the

authority described in paragraph (b) of this section, including the

specific hazardous duty or duty involving physical hardship; the

authorized position description(s); the number of employees paid the

differential; documentation of the conditions described in paragraph

(b) of this section; and the annual cost to the agency.

(e) So that OPM can evaluate agencies' use of this authority and

provide the Congress and others with information regarding its use,

each agency shall maintain such other records and submit to OPM such

other reports and data as OPM shall require.

4. In Sec. 550.906, paragraph (b) is revised to read as follows:

Sec. 550.906 Termination of hazard pay differential.

* * * * *

(b) Safety precautions have reduced the element of hazard to a less

than significant level of risk, consistent with generally accepted

standards that may be applicable, such as those published by the

Occupational Safety and Health Administration, Department of Labor; or

* * * * *

[FR Doc. 94-15695 Filed 6-28-94; 8:45 am]

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