Interim OPM Criteria for IRS Broadbanding System

OFFICE OF PERSONNEL MANAGEMENT

Interim OPM Criteria for IRS Broadbanding System

AGENCY: Office of Personnel Management.

ACTION: Notice with request for comments.

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SUMMARY: This notice publicizes interim criteria for broadbanding

systems for the Internal Revenue Service (IRS). The Internal Revenue

Service Restructuring and Reform Act of 1998 authorizes the Secretary

of the Treasury to establish one or more broadbanding systems covering

all or any portion of the IRS workforce under the General Schedule

(GS). Title 5, United States Code, directs the Office of Personnel

Management (OPM) to prescribe criteria for IRS broadbanding systems and

specifies certain principles that such criteria must follow, at a

minimum.

DATES: Submit comments on or before August 16, 1999.

ADDRESSES: Send written comments to Gregory Zygiel, U.S. Office of

Personnel Management, 1900 E Street, NW. Room 7305, Washington, DC

20415-8320, or submit comments electronically to [email protected].

FOR FURTHER INFORMATION CONTACT: Gregory Zygiel, 202-606-8047.

SUPPLEMENTARY INFORMATION: The Internal Revenue Service Restructuring

and Reform Act of 1998 (Pub. L. 105-206) authorizes the Secretary of

the Treasury to establish one or more broadbanding systems covering all

or any portion of the IRS workforce under the General Schedule (GS). 5

U.S.C. 9509(b) directs OPM to prescribe criteria for IRS broadbanding

systems and specifies certain principles that such criteria must

follow, at a minimum. The criteria were developed after conferring with

the Department of the Treasury, the Internal Revenue Service, and the

National Treasury Employees Union. They are designed to incorporate the

lessons learned from previous experience with broadbanding under

personnel demonstration projects.

5 U.S.C. 9509(b)(3) requires that employees covered by IRS

broadbanding systems will remain subject to the laws and regulations

covering General Schedule employees (e.g., locality payments, the

aggregate limitation on pay, premium pay, and recruitment and

relocation bonuses and retention allowances), except as otherwise

provided in the criteria.

The publication of these criteria permits IRS to implement

broadbanding systems under this authority. Before implementing any

broadbanding system under this authority, IRS must develop written

plans, policies, and implementing procedures that address each relevant

criterion, including descriptions of broadbanding structure(s),

classification criteria, positions covered, the method of pay

progression within a band, pay-setting policies, policies for paying

supervisors or management officials, and policies for converting

positions into broadbanding systems. Any public comments may assist OPM

in working with IRS as it develops such plans, policies, and

procedures.

Dated: July 9, 1999.

Office of Personnel Management.

Janice R. Lachance,

Director.

Table of Contents

I. Authority

II. Applicability

III. Broadbanding System Plan

IV. Definitions

V. Broadbanding Criteria

Appendix A: Staffing Supplements

Appendix B: Conversion into Broadbanding Systems

Appendix C: Procedures for Converting Employees Back to the General

Schedule Pay System

I. Authority

Section 9509 of title 5, United States Code, as added by the

Internal Revenue Service (IRS) Restructuring and Reform Act of 1998

(Public Law 105-206), provides the Secretary of the Treasury with the

authority to establish one or more broadbanding systems covering all or

any portion of the IRS workforce under the General Schedule (GS).

Section 9509(b) directs the Office of Personnel Management (OPM) to

prescribe criteria for IRS broadbanding systems and specifies certain

principles that such criteria must follow, at a minimum.

II. Applicability

Section 9509(a) defines a ``broad-banded system'' as a system for

grouping positions for pay, job evaluation, and other purposes that is

different from the General Schedule pay and classification system

established under chapter 51 and subchapter III of chapter 53 of title

5, United States Code. Employees covered by IRS broadbanding systems

are not covered by subchapter III of chapter 53 or by those provisions

of chapter 51 that define General Schedule grades. However, selected

provisions from those parts of law are used in applying parallel

features to employees in IRS

[[Page 38487]]

broadbanding systems, as provided in these criteria.

As required by 5 U.S.C. 9509(b)(3), employees covered by IRS

broadbanding systems are to be treated as if they are General Schedule

employees for the purpose of applying other laws and regulations

governing General Schedule employees, except as otherwise provided in

these criteria. Applicable laws and regulations include, but are not

limited to: 5 U.S.C. 5304, authorizing locality-based comparability

payments; 5 U.S.C. 5307, establishing a limitation on aggregate pay; 5

U.S.C. chapter 55, subchapter V, authorizing various forms of premium

pay; and 5 U.S.C. 5753 and 5754, authorizing recruitment and relocation

bonuses and retention allowances.

Note: Many title 5 provisions apply to Federal employees on a

more general basis and do not base coverage on whether an employee

is covered by the General Schedule system (e.g., severance pay,

leave, retirement, and insurance).

Employees in IRS broadbanding systems are not covered by the

special salary rate program established under 5 U.S.C. 5305. However,

IRS broadbanding systems may use a parallel authority to establish

staffing supplements, which are linked to established special salary

rates, as described in Appendix A.

These criteria apply only to broadbanding systems that cover

General Schedule positions. 5 U.S.C. 9509(b)(1)(B) authorizes the

Secretary of the Treasury, with the prior approval of the Director of

OPM, to include in a broadbanding system positions that otherwise would

be subject to subchapter IV of chapter 53 (prevailing rate systems) or

5 U.S.C. 5376 (senior-level positions). Including such positions would

require OPM's separate review and approval of a specific plan for that

purpose. The criteria presented here are not intended to apply to

broadbanding systems that include such positions.

III. Broadbanding System Plan

Before implementing any broadbanding system under this authority,

IRS must develop a written plan that includes policies and implementing

procedures to address each criterion that is relevant to the

broadbanding system, including descriptions of broadbanding

structure(s), positions covered, classification criteria, the method of

pay progression within a band, policies for setting and adjusting pay,

policies for paying supervisors or managerial employees, and policies

for converting positions into broadbanding systems.

IV. Definitions

Under these criteria--

Band means a pay level or work level within a career path

containing one or more General Schedule grades and related ranges of

pay.

Broadbanding system means a system for grouping positions for pay,

job evaluation, and other purposes that is different from the General

Schedule system established under chapter 51 and subchapter III of

chapter 53 of title 5, United States Code, as a result of combining the

grades and related ranges of pay for one or more occupational series.

Career path means a grouping of one or more occupational series

into broad occupational families or career tracks for job evaluation,

pay, or other purposes. A career path may contain one or more bands.

Employee means an individual who would otherwise be covered by

chapter 51 and subchapter III of chapter 53 of title 5, United States

Code, if not covered by a broadbanding system.

Supervisor and managerial employee have the meaning given those

terms in OPM's General Schedule Supervisory Grade Evaluation Guide.

V. Broadbanding Criteria

Criteria are provided below under the applicable principles listed

in 5 U.S.C. 9509(b)(3)(A)-(F) (labeled A-F) and an additional principle

(labeled G).

A. Ensure That the Structure of Any Broadbanding System Maintains the

Principle of Equal Pay for Substantially Equal Work

IRS broadbanding systems must--

1. Link to the General Schedule.

2. Assign occupations to career paths based on the nature of work

performed, the qualifications required, the normal career and pay

progression, and other characteristics of those occupations.

3. Combine General Schedule grades into bands following the

criteria in B. The range of difficulty and responsibility of each band

must be the same as the range of difficulty and responsibility of the

band's constituent grades (i.e., consistent with the grade level

criteria in standards published by OPM in accordance with 5 U.S.C.

5105) and must represent the normal range of work performed in the

organization.

4. Place positions into bands within career paths in accordance

with--

a. Classification standards published by OPM under 5 U.S.C. 5105;

or

b. Any agency guidance which places a position within its correct

band and career path (but which need not be sufficient to determine a

position's correct General Schedule grade).

5. Not include law enforcement officers covered by special salary

rates under section 403 of the Federal Employees Pay Comparability Act

of 1990 in the same band as non-law enforcement officers when the

maximum grade in the band is any one of grades 3 through 10.

6. Use established General Schedule rates of pay (including any

applicable locality rates or special salary rates) for premium pay

purposes under subchapter V of chapter 55 of title 5, United States

Code, and 5 CFR part 550, subpart A (i.e., for the purpose of

determining the maximum hourly overtime rate and the biweekly premium

pay limitation).

B. Establish the Minimum and Maximum Number of Grades That May Be

Combined Into Bands

A band under an IRS broadbanding system may contain--

1. A minimum of one General Schedule grade.

2. A maximum of--

a. Eight General Schedule grades when grades 13, 14, and 15 are not

included in the band;

b. Five General Schedule grades when grade 13 is included, but

neither grade 14 nor 15 is included in the band;

c. Three General Schedule grades when grade 14 is included, but

grade 15 is not included in the band; and

d. Two General Schedule grades when grade 15 is included in the

band.

C. Establish the Requirements for Setting the Minimum and Maximum Rates

of Pay in a Band

1. The minimum rate of basic pay for each band must equal the

minimum rate of basic pay payable under 5 U.S.C. 5332 for the lowest

General Schedule grade in that band. The maximum rate of basic pay for

each band must equal the maximum rate of basic pay payable under 5

U.S.C. 5332 for the highest General Schedule grade in that band.

a. Notwithstanding C1, preceding, the maximum rates of basic pay

for bands covering law enforcement officers must equal the maximum

special salary rates for grades 3 through 10 established under section

403 of the Federal Employees Pay Comparability Act of 1990, where

applicable.

b. The minimum and maximum rates of basic pay that define each band

must be adjusted at the same time and in the same manner as adjustments

are made in the corresponding minimum and maximum General Schedule

rates of basic pay under 5 U.S.C. 5303 or similar provision of law.

[[Page 38488]]

2. The maximum rate of basic pay for any band may not exceed the

maximum rate of basic pay for grade 15.

3. Employees in IRS broadbanding systems are not covered by the

special salary rate authority in 5 U.S.C. 5305. However, IRS

broadbanding systems may provide for the use of staffing supplements

instead of special salary rates under Appendix A of these criteria. If

special salary rates are not replaced with staffing supplements,

special rate employees must be converted into a broadbanding system

under the procedures established in Appendix B of these criteria.

4. Only employees receiving retained rates of pay under subchapter

VI of chapter 53 of title 5, United States Code, as applied in the

broadbanding system, or in an approved staffing supplement category may

receive rates of pay that exceed the locality-adjusted band maximum

rates.

D. Establish the Requirements for Adjusting the Pay of an Employee

Within a Band

1. IRS broadbanding systems must include--

a. Policies for adjusting the pay of an employee within a band,

including--

(1) Adjustments made in accordance with paragraphs D2a and D3a; and

(2) Increases based on individual factors such as an employee's

performance, skills, or competencies and/or time at pay level, except

that such increases may not be based solely on time at pay level.

Increases that advance an employee's relative position in a band (i.e.,

exceed the adjustments made in accordance with paragraphs D2a and D3a)

may be paid only to employees whose performance meets or exceeds

retention standards.

b. Policies concerning which level of management will make pay

adjustment decisions for employees.

c. Principles for managing pay progression and payroll costs

associated with basic pay adjustments. IRS must provide funding for

salary increases under its broadbanding systems. Because broadbanding

systems provide more choices on how to distribute pay to employees, it

is necessary to have an overall budget to manage the costs associated

with such choices. At a minimum, the salary increase budget must

include funds equal to the amounts that would be required for

individual pay adjustments made at the time of schedule adjustments

under 5 U.S.C. 5303 (or similar provision of law) and locality-based

comparability payments under 5 U.S.C. 5304 (or similar provision of

law). A salary increase budget must meet salary cost objectives and be

consistent with policies and procedures for adjusting pay under a

broadbanding system that are established to ensure equal pay for work

of equal value.

2. IRS broadbanding systems must provide for--

a. Making adjustments in the rates of basic pay for all employees

who are not supervisors or managerial employees equivalent to the

annual adjustments provided to General Schedule employees under 5 CFR

531.205. Employees on pay retention must be granted 50 percent of the

increase in the maximum rate of basic pay for their band.

b. The payment of locality-based comparability payments for

employees covered by 5 U.S.C. 5304 and 5 CFR part 531, subpart F, and

special geographic adjustments for law enforcement officers covered by

section 404 of the Federal Employees Pay Comparability Act of 1990 and

5 CFR part 531, subpart C. (See Appendix A for information on possible

staffing supplements.)

3. IRS pay adjustment policies may provide for--

a. Determining the circumstances under which adjustments in rates

of basic pay may be granted to supervisors or managerial employees up

to the equivalent of the annual adjustments provided to General

Schedule employees under 5 CFR 531.205. However, an employee's rate of

basic pay may not fall below the minimum rate of his or her band as a

result of receiving less than the full adjustment.

b. Reducing an employee's rate of basic pay within a band, but only

for unacceptable performance, misconduct, or loss of supervisory status

(if such loss results in reversal of a within-band adjustment granted

at the time of placement in a supervisory position). Any reductions

based on unacceptable performance or misconduct are adverse actions

under 5 U.S.C. 7512.

c. Control points within bands. Control points are dollar points

within bands that limit or restrict pay-setting or the movement of

employees through the rate range of the band. If control points are

used, IRS broadbanding systems must include policies on the number of

control points within bands and how they are derived (e.g., as a

percentage of the rate range) and applied (i.e., the circumstances

under which an employee's rate of pay may be set or adjusted at, above,

or below a control point).

E. Establish the Requirements for Setting the Pay of a Supervisory

Employee Whose Position Is in a Broad Band or Who Supervises Employees

Whose Positions Are in Broad Bands

1. IRS broadbanding systems may provide for a separate broadbanding

system or career path for supervisors and managerial employees.

2. A supervisor's or managerial employee's rate of pay may not be

based on the salaries of the employees he or she supervises or manages.

F. Establish the Requirements and Methodologies for Setting the Pay of

an Employee Upon Conversion to a Broadbanding System, Initial

Appointment, Change of Position or Type of Appointment (Including

Promotion, Demotion, Transfer, Reassignment, Reinstatement, Placement

in Another Broad Band, or Movement to a Different Geographic Location),

and Movement Between a Broadbanding System and Another Pay System

1. Conversion into a broadbanding system. IRS broadbanding systems

must include policies for determining the career path, band, and pay

rate for employees upon conversion into the system consistent with the

provisions in Appendix B. IRS broadbanding systems may also include

policies for making prorated within-grade increase or career-ladder

promotion payments to employees as an adjustment in basic pay or a

lump-sum payment upon conversion from the General Schedule to a

broadbanding system consistent with the provisions in Appendix B.

2. Pay-setting policies. IRS broadbanding systems must include

policies for determining an employee's career path, band, and rate of

basic pay upon initial appointment, promotion, demotion, transfer,

reassignment, or placement in a different band or career path. The

methods used to set pay must be consistent with the principle of equal

pay for substantially equal work.

a. Pay must be set at least at the minimum rate and must not exceed

the maximum rate of basic pay of the band to which assigned (unless pay

retention applies).

b. Policies must specify the conditions under which pay may be set

above the minimum rate of the band and the amount of any minimum or

maximum pay increase upon promotion. The time-in-grade provisions in 5

CFR 300.601-605 do not apply to employees under a broadbanding system.

c. Upon movement to a different geographic area, locality-based

[[Page 38489]]

comparability payments and special pay adjustments for law enforcement

officers must be redetermined and paid in accordance with 5 CFR part

531, subparts F and C, respectively. Staffing supplements must also be

redetermined consistent with the provisions in Appendix A.

d. Movement of an employee to a band with a lower maximum rate of

basic pay than the employee's former band is equivalent to a reduction

in grade for the purpose of chapters 43 and 75 of title 5, United

States Code.

3. Conversion to the General Schedule. Agencies must use the

procedures in Appendix C of these criteria for determining an

employee's GS equivalent grade and pay rate upon conversion from a

broadbanding system to the General Schedule.

G. Conform Related Provisions of Law and Regulations to Broadbanding

Systems

1. For provisions of chapter 51 that apply to the determination of

General Schedule grades, other than sections 5104 and 5105, the term

``grade'' is deemed to mean ``band within a career path.

2. The provisions in these criteria related to grade and pay

retention are based on the current grade and pay retention authority in

subchapter VI of title 5, United States Code, and 5 CFR part 536. When

applying the grade and pay retention provisions, users must substitute

``band'' for ``grade''. Under 5 U.S.C. 9509(c), the Secretary of the

Treasury may provide for variations from the grade and pay retention

authority for employees who are covered by broadbanding systems with

prior approval of the Director of OPM and in accordance with a plan for

implementing such variations.

3. In applying the severance pay provisions in 5 CFR part 550,

subpart G, to employees covered by IRS broadbanding systems, the

beginning of the first sentence in paragraph (c)(4) of the definition

of ``reasonable offer'' at Sec. 550.703 is deemed to read as follows:

(4) Not lower than two grade or pay levels (or one band level,

in the case of a broadbanding system under which the next lower band

comprises two or more grades) below the employee's current grade,

pay, or band level. * * *

Appendix A--Staffing Supplements

Internal Revenue Service (IRS) broadbanding systems may use

staffing supplements instead of the special salary rate authority in

5 U.S.C. 5305 under the following terms and conditions:

A. If an employee is assigned to an occupational series and

geographic area covered by a special salary rate under 5 U.S.C. 5305

and is in a band where the maximum adjusted rate for the banded GS

grades is a special rate that exceeds the maximum GS locality rate

under 5 U.S.C. 5304 (or similar provision of law) for the banded

grades, the employee is eligible for a staffing supplement.

B. Conversion. Upon conversion, the employee's broadbanding rate

of basic pay is established by dividing the employee's old GS

adjusted rate (the higher of the special rate or locality rate) by

the staffing factor. The staffing factor is determined by dividing

the maximum special rate for the banded grades by the GS unadjusted

rate corresponding to that special rate (step 10 of the GS rate for

the same grade as the special rate). The employee's staffing

supplement is derived by multiplying the employee's broadbanding

rate of basic pay by the staffing factor minus one. The employee's

final staffing supplement-adjusted rate equals the employee's

broadbanding rate of basic pay plus the staffing supplement. This

amount will equal the employee's former GS adjusted rate of pay.

Since the employee's total pay immediately after conversion into the

broadbanding system will be the same as immediately before

conversion, adverse action and pay retention provisions do not

apply.

C. Formulas. The conversion rules in paragraph B are expressed

by the following formulas:

1. Staffing Factor = Maximum special rate for banded grades

Unadjusted GS rate corresponding to that special rate

2. Broadbanding Basic Rate = Old GS adjusted rate (special or

locality rate) Staffing Factor

3. Staffing Supplement = Broadbanding Basic Rate x (Staffing

Factor -1)

4. Salary at conversion = Broadbanding Basic Rate + Staffing

Supplement (sum will equal old GS adjusted rate)

D. If an employee is in a band where the maximum GS adjusted

rate for the banded grades is a locality rate, the broadbanding

basic rate upon conversion into a broadbanding system is derived by

dividing the employee's former GS adjusted rate (the higher of the

locality rate or special rate) by the applicable locality pay factor

(e.g., 1.0787 in the Washington-Baltimore locality pay area in

1999). The employee's broadbanding locality-adjusted rate will equal

the employee's former GS adjusted rate. Adverse action and pay

retention provisions do not apply because there is no change in

total salary.

E. The staffing supplement is added to the employee's

broadbanding basic rate much like locality adjustments are added to

basic pay. Any General Schedule or special rate schedule adjustment

will require recomputation of the staffing supplement. Employees

receiving a staffing supplement remain entitled to an underlying

locality rate, which may, over time, supersede the need for a

staffing supplement. If OPM discontinues or decreases a special rate

schedule on which staffing supplements are based, pay retention

rules will be applied, as appropriate. Upon geographic movement, an

employee who receives a staffing supplement will have the supplement

removed or recomputed to reflect any applicable special rates in the

new location, consistent with paragraph C. Any resulting reduction

in pay is not an adverse action or a basis for pay retention.

F. The employee's broadbanding basic rate adjusted by the

staffing supplement is basic pay for the same purposes as a locality

rate under 5 CFR 531.606(b)--i.e., for retirement, life insurance,

premium pay, and severance pay purposes, and for advances in pay.

The staffing supplement is also basic pay under 5 U.S.C. 5363 and

subchapter II of chapter 75 for the limited purpose of determining

whether a reduction in basic pay occurs at the point of an

employee's conversion into a broadbanding system. The staffing

supplement will also be used to compute worker's compensation

payments and lump-sum payments for accrued and accumulated annual

leave.

G. The Office of Personnel Management may approve staffing

supplements for categories of employees within an IRS broadbanding

system who are not in approved special rate categories for General

Schedule employees, consistent with the provisions in 5 U.S.C. 5305

(a) and (b).

Appendix B--Conversion Into Broadbanding Systems

Internal Revenue Service (IRS) broadbanding systems must include

policies for determining the career path, band, and pay rate for

employees upon conversion into a broadbanding system under the

following terms and conditions:

A. Employees may not suffer a reduction in total pay upon

initial conversion to a broadbanding system.

B. If conversion into a broadbanding system is accompanied by a

simultaneous geographic move, the employee's General Schedule pay

entitlements in the new geographic area must be determined before

converting the employee into the broadbanding system.

C. IRS broadbanding systems may include policies for making

prorated within-grade increase or career-ladder promotion payments

to employees as an adjustment in basic pay or a lump-sum payment

upon conversion from the General Schedule to a broadbanding system

under the following conditions:

1. The amount of any within-grade increase or career-ladder

promotion payment may not be more than the prorated value of the

employee's within-grade increase or career-ladder promotion at the

time of conversion, based on the number of weeks of creditable

service the employee has performed as of the date of initial

conversion into the broadbanding system. There is no restriction on

when such payments may be made.

2. A prorated within-grade increase or career-ladder promotion

payment may be made only to an employee whose performance meets or

exceeds retention standards at the time of conversion into a

broadbanding system.

3. A within-grade increase payment may not be made to an

employee receiving the maximum rate of pay for his or her grade (or

band, if made after conversion into a broadbanding system) or a

retained rate.

4. For employees receiving special rates before conversion into

an IRS broadbanding

[[Page 38490]]

system, the pay conversion described in paragraph D must be applied

before making any prorated within-grade increase or career-ladder

promotion payment.

D. Special salary rate employees. If an IRS broadbanding system

uses staffing supplements instead of special rates under 5 U.S.C.

5305, special rate employees must be converted into the system

consistent with the provisions in Appendix A. If an IRS broadbanding

system eliminates special salary rates, a new locality-adjusted rate

of pay must be derived for each employee, as follows:

1. Divide the employee's adjusted rate of basic pay (the higher

of the special rate or locality rate or similar adjusted rate) by

the locality pay factor for the area (e.g., 1.0787 for the

Washington-Baltimore locality pay area in 1999) to determine the new

broadbanding rate of basic pay. If the employee's broadbanding rate

of basic pay exceeds the maximum rate of basic pay for the

employee's band, the employee must be placed on pay retention.

2. Add the full locality adjustment to the employee's

broadbanding rate of basic pay, including any retained rate. The

locality adjustment is basic pay under 5 U.S.C. 5363 and subchapter

II of chapter 75 for the limited purpose of determining whether a

reduction in basic pay occurs at the point of an employee's

conversion into a broadbanding system.

E. Employees on pay retention. Upon conversion, employees on pay

retention must be placed in the band commensurate with the grade of

their position. If possible, an employee's rate of basic pay will be

placed within the assigned band. If not possible (because the

employee's retained rate is higher than the maximum rate of basic

pay of the band), the employee will be placed on pay retention.

F. Employees on grade retention. Upon conversion, employees on

grade retention must be placed in the band that encompasses their

retained grade until the original 2-year grade retention period

expires. When the 2-year period expires, employees must be moved to

the band that encompasses the grade of their position. If the rate

of basic pay exceeds the maximum rate of the new band, the employee

is entitled to pay retention.

Appendix C--Procedures for Converting Employees Back to the General

Schedule Pay System

When an employee covered by a broadbanding system moves to a

General Schedule (GS) position, the following procedures must be

used to convert the employee's band and pay rate to a GS equivalent

grade and rate of pay. The converted GS-equivalent grade and rate of

pay must be determined before movement or conversion out of the

broadbanding system and any accompanying geographic movement,

promotion, or other simultaneous action. For lateral reassignments

and lateral transfers, the converted GS grade and rate of pay

becomes the employee's actual GS grade and rate of pay, unless the

employee is immediately affected by a simultaneous geographic

movement or another pay action. For non-lateral transfers,

promotions, and other actions, the converted GS grade and rate of

pay are deemed to be the employee's grade and rate of pay at the

time of movement out of the broadbanding system and must be used in

applying any GS pay administration rules applicable in connection

with the employee's movement out of the broadbanding system (e.g.,

rules for promotions, highest previous rate, and pay retention).

A. GS grade level determination--Upon conversion of an employee

out of a broadbanding system to the GS pay system, the employee's

GS-equivalent grade level must be determined in accordance with the

following rules:

1. An employee in a band encompassing a single GS grade must be

converted to that grade.

2. For an employee in a band encompassing more than one GS

grade, the employee's adjusted rate of pay under the broadbanding

system (including any locality adjustment (or similar geographic

adjustment) or staffing supplement, as applicable) must be compared

with the rates of pay in the highest applicable GS rate range for

each grade encompassed by the band. (For this purpose, a ``GS rate

range'' includes a rate range in (1) The GS basic pay schedule, (2)

the locality pay schedule (including any special geographic-adjusted

schedule for law enforcement officers (LEOs)) for the locality pay

area in which the position is located, or (3) the appropriate

special rate schedule for the employee's occupational series and

geographic location, as applicable). If the employee's occupational

series is a two-grade interval series, consider only odd-numbered

grades between GS-5 and GS-11.

3. If the employee's adjusted rate of pay under the broadbanding

system fits into an area of the rate range for a GS grade in the

band that does not overlap with the rate range of the next higher or

lower grade in the same band, the employee is converted to that GS

grade.

4. If the employee's adjusted rate of pay fits into an area of a

rate range for a GS grade in the band that overlaps with the rate

range of the next higher or lower grade in the same band, compare

the employee's adjusted rate of pay with the dollar midpoint of the

overlap area. If the employee's adjusted rate of pay is lower than

the dollar midpoint of the overlap area, convert the employee to the

lower grade. If the employee's rate of pay is equal to or higher

than the dollar midpoint of the overlap area, convert the employee

to the higher grade.

5. Exception: An employee may not be converted to a lower grade

than the grade held by the employee immediately preceding

conversion, lateral reassignment, or lateral transfer into the

broadbanding system, unless since that time the employee has

undergone a reduction in band.

B. GS pay rate determination--An employee's pay within the

converted GS grade must be set by converting the employee's adjusted

rate of pay under the broadbanding system to a GS-equivalent rate of

pay in accordance with the following rules:

1. The employee's adjusted rate of basic pay under the

broadbanding system (including any locality adjustment (or similar

geographic adjustment) or staffing supplement, as applicable) must

be converted to a GS adjusted rate on the highest applicable rate

range for the converted GS grade. (For this purpose, a ``GS rate

range'' includes a rate range in (1) the GS basic pay schedule, (2)

an applicable locality pay schedule (including any special

geographic-adjusted schedule for LEOs), or (3) an applicable special

rate schedule.)

2. If the highest applicable GS rate range is under a locality

pay schedule, the employee's adjusted rate of pay under the

broadbanding system must be converted to a GS locality rate of pay.

If this rate falls between two steps of the locality pay schedule,

the rate must be set at the higher step. The converted GS unadjusted

rate of basic pay is the rate corresponding to the converted GS

locality rate of pay. (If such an employee is also covered by a

special rate schedule as a GS employee, the converted special rate

must be determined based on the GS step position.)

3. If the highest applicable GS rate range is a special rate

range, the employee's adjusted rate of pay under the broadbanding

system must be converted to a special rate. If this rate falls

between two steps of the special rate schedule, the rate must be set

at the higher step. The converted GS unadjusted rate of basic pay is

the rate corresponding to the converted special rate.

C. Apply the following procedures to determine the converted GS-

equivalent grade and pay rate for employees retaining a band before

conversion or for employees entitled to a retained rate exceeding

the maximum rate of the highest applicable rate range. The

employee's GS-equivalent grade and rate of pay derived using the

procedures below must be used in applying any GS pay administration

rules applicable in connection with the employee's movement out of

the broadbanding system.

1. If an employee is retaining a band, apply the procedures in

A1-A5 and B1-B3, preceding, using the grades encompassed by the

employee's retained band to determine the employee's GS-equivalent

retained grade and pay rate. The time in a retained band counts

toward the 2-year limit on grade retention in 5 U.S.C. 5382.

2. If the employee's rate of pay under the broadbanding system

is a retained rate, the employee's GS-equivalent grade is the

highest grade encompassed in his or her band.

------------------------------------------------------------------------

If the employee's adjusted retained

rate: Then:

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(i) Is less than the maximum rate of Apply the procedures in B1-B3

the highest applicable rate range. to determine the employee's GS-

equivalent pay rate.

[[Page 38491]]

(ii) Exceeds the maximum rate of the Convert the employee's

highest applicable rate range and the unadjusted retained rate to a

employee is not in a special rate GS-equivalent retained rate.

category.

(iii) Exceeds the maximum rate of the Convert the employee's adjusted

highest applicable rate range and the retained rate to a GS-

employee is in a special rate category. equivalent retained rate.

------------------------------------------------------------------------

D. Within-grade increase ``equivalent increase''

determinations--Service under a broadbanding system is creditable

for within-grade increase purposes upon conversion to the GS pay

system. Basic pay increases (excluding general structural increases)

under a broadbanding system are ``equivalent increases'' for the

purpose of determining the commencement of a within-grade increase

waiting period under 5 CFR 531.405(b). A performance-based increase

in basic pay of any amount (including a zero increase) is considered

an ``equivalent increase'' for this purpose.

[FR Doc. 99-18191 Filed 7-15-99; 8:45 am]

BILLING CODE 6325-01-P