Termination of the Performance Management and Recognition System

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

regulations to implement the ``Performance Management and Recognition

System Termination Act of 1993'' (Pub. L. 103-89), which provides for

the temporary extension and orderly termination of the Performance

Management and Recognition System (PMRS) and specifies how former PMRS

employees will be paid.

EFFECTIVE DATE: September 9, 1994.

FOR FURTHER INFORMATION CONTACT:

James Weddel, (202) 606-2858, concerning questions about the changes in

5 CFR parts 511, 530, 531, 536, 575, 591, and 595; and Barbara Colchao,

(202) 606-2720, concerning questions about the changes in 5 CFR parts

293, 351, 430, 432, 451, 540, and 771.

SUPPLEMENTARY INFORMATION: On December 15, 1993, at 58 FR 65531, OPM

published interim regulations to implement the ``Performance Management

and Recognition System Termination Act of 1993'' (Pub. L. 103-89), with

a 60-day comment period. These regulations were made effective

retroactive to November 1, 1993.

On December 30, 1993, at 58 FR 69169, OPM published final

regulations to implement locality-based comparability payments under

the ``Federal Employees Pay Comparability Act of 1990'' (FEPCA) (Pub.

L. 101-509). The locality pay regulations revised the definitions of

scheduled annual rate of pay in Secs. 531.101 and 531.301 which were

previously published in the interim regulations implementing the PMRS

Termination Act. The final regulations on locality pay were made

effective January 1, 1994, and were applicable on the first day of the

first pay period beginning on or after January 1, 1994.

On February 3, 1994, at 59 FR 5223, OPM published corrections to

fix three typographical errors in the interim regulations for PMRS

termination.

During the comment period, which ended February 14, 1994, OPM

received three comments, each from a different Federal agency. One

agency suggested revising the regulations to clarify that employees

cannot ``become'' GM employees after November 1, 1993, and to specify

the personnel actions that would trigger loss of GM status. A second

agency asked for clarification of whether an employee who loses

coverage as a result of a temporary promotion regains coverage when the

temporary promotion ends, and if so, how the employee's pay would be

set. A third agency felt that the text of Sec. 531.406(b)(2) (i)-(iii)

specifying when time in a non-pay status is creditable service for a

within-grade increase should be simplified. The agency also asserted

that certain definitions in Secs. 531.101 and 531.301 were superseded

by revised definitions in the final locality pay regulations. Finally,

it was called to our attention that the instructions for setting pay on

loss of GM status should be revised to clarify that pay retention is

not required if an employee requests a reduction in grade.

Following are the major issues raised, a summary of comments on

each issue, and a discussion of changes made to the interim

regulations.

1. The definition of GM employee and loss of status as a GM

employee.

Summary of Comments: One agency suggested that the statutory basis

(Pub. L. 103-89) for the definition of GM employee should be introduced

in its regulatory definition in Sec. 531.202. The agency also noted

that the timing and basis for GM status could be clarified. Another

agency specifically asked for clarification of whether an employee who

loses GM status when temporarily promoted after October 31, 1993,

regains GM status when the temporary promotion ends.

Discussion and Changes: OPM is adopting the suggestion that section

4 of Pub. L. 103-89, the Performance Management and Recognition System

Termination Act of 1993, be introduced in the definition of GM employee

(see Sec. 531.202(e)). Where possible, we are replacing references to

coverage under section 4 of the Act with references to the amended

definition of GM employee and, where appropriate, to a new paragraph,

``status as a GM employee'' (see Sec. 531.203(g)), which specifies

personnel actions under which an employee would retain or permanently

lose GM status (see Sec. 531.204 (d), (e) and (f), and

Sec. 536.308(b)(3)). Also, Sec. 531.204(d) and the definition of GM

employee have been amended to remove any suggestion that status as a GM

employee can be acquired any time other than on November 1, 1993, the

effective date of section 4 of the Act.

When a temporary promotion begins after October 31, 1993, coverage

under section 4 of the PMRS Termination Act (GM status) ends because of

the change in grade. Coverage cannot be regained once it is lost

because it is linked to continuous service as a supervisor or

management official in the same grade and in the same agency after

October 31, 1993. Coverage is acquired only once, on November 1, 1993.

On the employee's return to the lower grade, the agency must set

pay using GS pay setting rules. The agency may restore the employee's

rate of basic pay to what it would have been had there never been a

temporary promotion (including any within-grade or merit increases that

would have been granted at the lower grade). Also, if permitted by its

own policies, the agency may instead set pay at a higher rate using the

highest previous rate under Sec. 531.203(d). In either pay-setting

procedure, if the recomputed rate of basic pay falls between steps of a

GS grade or a special salary rate schedule, the rate of basic pay must

be set at the next higher step within the lower grade. To clarify this

policy, OPM has added a new paragraph entitled, ``expiration or

termination of temporary promotions'' (see Sec. 531.204(c)). This

replaces OPM guidance that was previously published in Federal

Personnel Manual (FPM) Supplement 990-2, Book 531, S4-5d. That guidance

has been abolished by the sunset of the FPM.

2. Setting pay on loss of GM status through voluntary reduction in

grade.

Summary of Comments: It was called to our attention that the

regulation on setting pay on loss of GM status implies that an employee

retains pay if he or she is voluntarily reduced in grade (see

redesignated 5 CFR 531.204(e)).

Discussion and Change: A new paragraph has been added to clarify

that the provisions of Sec. 531.204(e) (1) through (4) do not apply

when an employee loses GM status as a result of a reduction in grade at

the employee's request (see Sec. 531.204(f)(3)). Rather, an agency may

set pay at the lowest step of the lower grade or at a higher step in

the lower grade under its policies for applying the maximum payable

rate rules.

3. Creditable service in a waiting period for a within-grade-

increase when an employee is in a non-pay status.

Summary of Comments: One agency proposed simplifying regulatory

text by combining separate language for GS and GM employees.

Discussion and Change: OPM is removing unnecessary references to

steps, next higher rate within the grade, and GM employee in

Sec. 531.406(b)(2) (i)-(iii) to be consistent with the language used to

establish the length of waiting periods in Sec. 531.405.

4. The impact of final locality pay regulations on PMRS termination

regulations.

Summary of Comments: One agency commented that the revised

definitions in Secs. 531.101 and 531.301 of the interim regulations are

no longer current since the definitions were subsequently revised again

by the final regulations implementing locality pay adjustments.

Discussion and Change: This comment is partially correct. The

current definition of scheduled annual rate of pay in Secs. 531.101 and

531.301 is the definition as revised in the locality pay regulations

published in the Federal Register on December 30, 1993 (58 FR 69169).

However, the current definition of employee in Sec. 531.101 is the

definition as revised in the interim PMRS termination regulations.

There is no change, except that a statutory reference in the employee

definition in Sec. 531.101 is clarified by inserting ``of title 5.''

Editorial Revisions to Regulations

References to the PMRS Termination Act in Secs. 530.306(b)(2),

531.401(d), and 531.502 are clarified by replacing ``Public Law 103-

89'' with ``the Performance Management and Recognition System

Termination Act of 1993 (Pub. L. 103-89).'' References to GM employee

in Secs. 531.203(c)(2) and 531.205(a)(2)(i) are clarified by inserting

the citation, ``(as defined in Sec. 531.202).'' Also, minor editorial

changes are being made to correct errors or clarify text at

Secs. 531.204(e)(1), 531.205(a)(2) (ii) through (iv), 531.403,

531.405(a) (1) and (2), and 536.308 (a) and (b).

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

5 CFR Part 293

Archives and records, Freedom of information, Government employees,

Health records, Privacy.

5 CFR Parts 351 and 432

Administrative practice and procedure, Government employees.

5 CFR Parts 430 and 451

Awards, Government employees, Medals.

5 CFR Part 511

Administrative practice and procedure, Freedom of information,

Government employees, Wages.

5 CFR Part 530

Government employees, Reporting and recordkeeping requirements,

Wages.

5 CFR Part 531

Government employees, Law enforcement officers, Wages.

5 CFR Parts 540 and 575

Government employees, Wages.

5 CFR Part 536

Administrative practice and procedure, Freedom of information,

Government employees, Reporting and recordkeeping requirements, Wages.

5 CFR Part 591

Government employees, Travel and transportation expenses, Wages.

5 CFR Part 595

Government employees, Health professions, Wages.

5 CFR Part 771

Administrative practice and procedure, Government employees.

Office of Personnel Management

Lorraine A. Green,

Deputy Director.

Accordingly, the interim rule amending 5 CFR parts 293, 351, 430,

432, 451, 511, 530, 531, 536, 540, 575, 591, 595, and 771 published at

58 FR 65531 on December 15, 1993, amended by the final rule amending 5

CFR part 531 published at 58 FR 69169 on December 30, 1993, and

corrected at 59 FR 5223 on February 3, 1994, is adopted as final with

the following changes:

PART 530--PAY RATES AND SYSTEMS (GENERAL)

1. The authority citation for part 530 continues to read as

follows:

Authority: 5 U.S.C. 5305 and 5307; E.O. 12748;

Subpart B also issued under sec. 302(c) and 404(c) of the

Federal Employees Pay Comparability Act of 1990 (Pub. L. 101-509),

104 Stat. 1462 and 1466, respectively;

Subpart C also issued under sec. 4 of the Performance Management

and Recognition System Termination Act of 1993 (Pub. L. 103-89), 107

Stat. 981.

2. In Sec. 530.306, paragraph (b)(2) is revised to read as follows:

Sec. 530.306 Determining employee rates.

* * * * *

(b) * * *

(2) If the employee is receiving a rate of basic pay applicable to

a GM employee (as defined in Sec. 531.202 of this chapter), the

employee shall receive his or her existing rate. This rate may be lower

than the minimum rate for the regular schedule, as permitted by section

4 of the Performance Management and Recognition System Termination Act

of 1993 (Pub. L. 103-89). If the employee's existing rate exceeds the

maximum rate for the regular or decreased special salary rate schedule,

the employee shall be entitled to the existing rate, as provided in

Sec. 536.104(a)(3) of this chapter.

* * * * *

PART 531--PAY UNDER THE GENERAL SCHEDULE

3. The authority citation for part 531 continues to read as

follows:

Authority: 5 U.S.C. 5115, 5307, 5338; sec. 4 of the Performance

Management and Recognition System Termination Act of 1993, 107 Stat.

981; E.O. 12748, 56 FR 4521, February 4, 1991, 3 CFR 1991 Comp., p.

316;

Subpart A also issued under section 302 of the Federal Employees

Pay Comparability Act of 1990 (FEPCA), 104 Stat. 1462, 5 U.S.C.

5304, 5305, and 5553, and E.O. 12786, 56 FR 67453, December 30,

1991, 3 CFR 1991 Comp., p. 376;

Subpart B also issued under 5 U.S.C. 5303(g), 5333, 5334(a), and

7701(b)(2);

Subpart C also issued under section 404 of FEPCA, 104 Stat.

1466, section 3(7) of Pub. L. 102-378 (October 2, 1992), section 302

of FEPCA, 104 Stat. 1462, and 5 U.S.C. 5304, 5305, and 5553;

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,

and E.O. 12883, 58 FR 63281, November 29, 1993, 3 CFR 1993 Comp., p.

682.

4. In Sec. 531.101, the definition of employee is revised to read

as follows:

Sec. 531.101 Definitions.

* * * * *

Employee means an employee in a position to which subchapter III of

chapter 53 of title 5, United States Code, applies, whose official duty

station is located in an interim geographic adjustment area, including

an employee in a position authorized by Sec. 213.3102(w) of this

chapter whose rate of basic pay is established under the General

Schedule.

* * * * *

5. In Sec. 531.202, the first sentence of paragraph (e) is revised

to read as follow:

Sec. 531.202 Definitions.

* * * * *

(e) GM employee means an employee who was covered by the

Performance Management and Recognition System under chapter 54 of title

5, United States Code, on October 31, 1993 (and therefore became

covered on November 1, 1993, by section 4 of Pub. L. 103-89, the

Performance Management and Recognition System Termination Act of 1993),

and who continues thereafter to occupy a position as a supervisor or

management official (as defined in paragraphs (10) and (11) of section

7103(a) of title 5, United States Code) in the same grade of the

General Schedule and in the same agency without a break in service of

more than 3 calendar days.* * *

* * * * *

6. In Sec. 531.203, the first sentence of paragraph (c)(2)

introductory text is revised, and a new paragraph (g) is added to read

as follows:

Sec. 531.203 General provisions.

* * * * *

(c) * * *

(2) The maximum rate of basic pay that may be paid a GM employee

(as defined in Sec. 531.202) shall be determined as follows: * * *

* * * * *

(g) Status as a GM employee. (1) An employee retains status as a GM

employee (as defined in Sec. 531.202) when detailed to any position or

when reassigned to another General Schedule position in which the

employee continues to be a supervisor or management official (as

defined in paragraphs (10) and (11) of section 7103(a) of title 5,

United States Code).

(2) An employee permanently loses status as a GM employee if the

employee is promoted (including a temporary or term promotion),

transferred, reduced in grade, reassigned to a position in which the

employee will no longer be a supervisor or management official, or has

a break in service of more than 3 calendar days.

7. In Sec. 531.204, paragraphs (c) through (e) are redesignated as

paragraphs (d) through (f), respectively; a new paragraph (c) is added;

and newly redesignated paragraph (d), the introductory text of newly

redesignated paragraph (e), newly redesignated paragraph (e)(1), and

newly redesignated paragraph (f) are revised to read as follows:

Sec. 531.204 Special provisions.

* * * * *

(c) Expiration or termination of temporary promotions. (1) On

expiration or termination of a temporary promotion when an employee is

returned to the lower grade, an agency must recompute the employee's

rate of basic pay for the lower grade as if the employee had not been

temporarily promoted unless the agency sets pay at a higher rate under

Sec. 531.203(d).

(2) In the case of an employee whose rate of basic pay would

otherwise fall between two steps of General Schedule grade or

applicable special rate range, the rate of basic pay of the employee

must be increased to the rate for the next higher step of the grade or

special rate range.

(d) Rate of basic pay on acquiring status as a GM employee. On

acquiring status as a GM employee (as defined in Sec. 531.202) on

November 1, 1993, an employee shall continue to receive the rate of

basic pay that was payable on October 31, 1993.

(e) Rate of basic pay on loss of status as a GM employee. On loss

of status as a GM employee (as defined in Sec. 531.202) under

Sec. 531.203(g)(2), an employee shall receive (except as provided in

paragraph (f) of this section) his or her existing rate of basic pay,

plus any of the following adjustments that may be applicable, in the

order specified:

(1) The amount of any annual adjustment under section 5303 of title

5, United States Code, to which the employee would otherwise be

entitled on that date or, for an employee subject to special pay rates,

the amount of any pay adjustment made on that date under section 5305

of title 5, United States Code, and part 530 of this chapter;

* * * * *

(f) Special exceptions. Paragraphs (e) (1) through (4) of this

section do not apply to any employee who loses status as a GM employee

(as defined in Sec. 531.202) under Sec. 531.203(g)(2) as a result of--

(1) An action taken for disciplinary or performance related

reasons;

(2) The expiration or termination of a temporary promotion; or

(3) A reduction in grade at the employee's request.

8. In Sec. 531.205, paragraph (a)(2)(i) introductory text and

paragraphs (a)(2)(ii) through (iv) are revised to read as follows:

Sec. 531.205 Pay schedule conversion rules at the time of an annual

pay adjustment under 5 U.S.C. 5303.

(a) * * *

(2)(i) Except as provided in paragraphs (a)(2)(ii) through (iv) of

this section, an agency shall determine the annual pay adjustment under

5 U.S.C. 5303 for a GM employee (as defined in Sec. 531.202) as

follows:

* * * * *

(ii) The rate of basic pay of an employee which is at the minimum

or maximum of the rate range in effect on the day preceding the pay

adjustment shall be adjusted to the minimum or maximum of the new rate

range, respectively.

(iii) The rate of basic pay of an employee which is less than the

minimum rate of the rate range of the employee's position shall be

increased by the full amount of the annual pay adjustment under 5

U.S.C. 5303 applicable to the rate range of the grade of the employee's

position.

(iv) An employee who is receiving retained pay shall receive one-

half of the annual pay adjustment under 5 U.S.C. 5303, as required by 5

U.S.C. 5363(a).

* * * * *

9. In Sec. 531.401, paragraph (d) is revised to read as follows:

Sec. 531.401 Principal authorities.

* * * * *

(d) Section 4 of the Performance Management and Recognition System

Termination Act of 1993 (Pub. L. 103-89) provides that ``the Office of

Personnel Management shall prescribe regulations necessary for the

administration of this section.''

10. In Sec. 531.403, the introductory text of the definition of

within-grade increase is revised to read as follows:

Sec. 531.403 Definitions.

Within-grade increase is synonymous with the term ``step increase''

used in section 5335 of title 5, United States Code, and means--

* * * * *

11. In Sec. 531.405, the introductory paragraphs of (a)(1) and

(a)(2) are revised to read as follows:

Sec. 531.405 Waiting periods for within-grade increase.

(a) Length of waiting period. (1) For an employee with a scheduled

tour of duty, the waiting periods for advancement to the next higher

step in all General Schedule grades (or the next higher rate within the

grade, as defined in Sec. 531.403) are:

* * * * *

(2) For an employee without a scheduled tour of duty, the waiting

periods for advancement to the next higher step of all General Schedule

grades (or the next higher rate within the grade, as defined in

Sec. 531.403) are:

* * * * *

12. In Sec. 531.406, paragraphs (b)(2)(i) through (iii) are revised

to read as follows:

Sec. 531.406 Creditable service.

* * * * *

(b) * * *

(2) * * *

(i) Two workweeks in the waiting period for an employee whose rate

of basic pay is less than the rate of basic pay for step 4 of the

applicable grade;

(ii) Four workweeks in the waiting period for an employee whose

rate of basic pay is equal to or greater than the rate of basic pay for

step 4 of the applicable grade and less than the rate of basic pay for

step 7 of the applicable grade; and

(iii) Six workweeks in the waiting period for an employee whose

rate of basic pay is equal to or greater than the rate of basic pay for

step 7 of the applicable grade.

* * * * *

13. In Sec. 531.502, the definition of quality step increase is

revised to read as follows:

Sec. 531.502 Definitions.

* * * * *

Quality step increase is synonymous with the term ``step increase''

used in section 5336 of title 5, United States Code, and means an

increase in an employee's rate of basic pay from one step or rate of

the grade of his or her position to the next higher step of that grade

or next higher rate within the grade (as defined in Sec. 531.403) in

accordance with section 5336 of title 5, United States Code, section 4

of the Performance Management and Recognition System Termination Act of

1993 (Pub. L. 103-89), and this subpart.

PART 536--GRADE AND PAY RETENTION

14. The authority citation for part 536 continues to read as

follows:

Authority: 5 U.S.C. 5361-5366; sec. 7202(f) of the Omnibus

Budget Reconciliation Act of 1990 (Pub. L. 101-508), 104 Stat. 1338-

336; sec. 4 of the Performance Management and Recognition System

Termination Act of 1993, 107 Stat. 981; Sec. 536.307 also issued

under 5 U.S.C. 552, Freedom of Information Act, Pub. L. 92-502.

Subpart A--Definitions; Coverage and Applicability

15. In Sec. 536.308, paragraph (a), the introductory text of

paragraph (b), and paragraph (b)(3) are revised to read as follows:

Sec. 536.308 Applicability of retained grade.

(a) Except as provided in paragraph (b) of this section, when an

employee is entitled to grade retention, the retained grade shall be

treated as the employee's grade for all purposes, including pay and pay

administration, retirement, life insurance, and eligibility for

training.

(b) The retained grade may not be used--

* * * * *

(3) To determine whether an employee retains status as a GM

employee (as defined in Sec. 531.202 of this chapter); or

* * * * *

[FR Doc. 94-19261 Filed 8-9-94; 8:45 am]

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