U.S. Office of Personnel Management - Ensuring the Federal Government has an effective civilian workforce

Attachment 1

2007 ANNUAL REVIEW INSTRUCTIONS

1.   General

The U.S. Office of Personnel Management (OPM) is conducting the 2007 review of special rates authorized by 5 U.S.C. 5305 and 5 CFR part 530, subpart C. OPM authorizes special rates for specific occupations, grades, and locations to alleviate existing or likely recruitment or retention problems. The special rate schedules applicable to your agency are listed in the index in Attachment 2. Please note that the six schedules for information technology (IT) employees, tables 999A-999F, are listed in the third row of the index and are applicable to all agencies employing General Schedule (GS) employees even though they are not shown in the individual agency listings.

2. Deadline

Agencies must submit all annual review materials to OPM by October 12, 2007, unless an extension is approved by OPM. Please send your materials to the Center for Pay and Leave Administration by email at pay-performance-policy@opm.gov, by fax at (202) 606-0824, or by mail to the following address:

3.   Agency Reviews

In conducting the annual review of special rates, OPM relies on the reviews conducted by agencies employing special rate employees. In conducting their reviews, agencies must consider the circumstances and factors consistent with OPM's regulations at 5 CFR 530.304 and 530.306.

4.   Adjustments Equal to the GS Adjustment

Agencies do not need to submit any documentation to request adjustments in special rate schedules equal to the GS annual pay adjustment in January 2008. As permitted by 5 CFR 530.307, special rate schedules will automatically be adjusted in January 2008 by the GS annual pay adjustment without any agency action, unless OPM specifically approves an alternative adjustment. This means that fixed-dollar special rate supplements will be adjusted by approximately the same percentage as the January 2008 GS annual pay adjustment, while fixed-percentage supplements will remain at the same percentage amount.

5.   Adjustments Greater Than the GS Adjustment

Agencies requesting special rate adjustments that are greater than the January 2008 GS annual pay adjustment must submit additional data in accordance with OPM regulations and the instructions on OPM Form 1397. (See 5 CFR 530.304 and 530.306.) Staffing data should cover the period from May 28, 2006, through May 26, 2007, if possible. (A copy of OPM Form 1397 is available at http://www.opm.gov/oca/compmemo/2000/ssrpage.asp.)

All requests for special rate adjustments greater than the January 2008 GS annual pay adjustment must address the existing or likely significant recruitment or retention problem justifying the proposed increase. Requests for special rate increases to keep up with GS locality pay increases or to maintain an advantage over GS locality rates without evidence of an existing or likely significant recruitment or retention problem will not be considered.

When determining whether to request a special rate adjustment greater than the January 2008 GS annual pay adjustment, agencies also should consider the use of other human resources flexibilities to address targeted, short-term recruitment and retention problems. These flexibilities include recruitment, relocation and retention incentives; the superior qualifications and special needs pay-setting authority; and the student loan repayment program. For example, recruitment, relocation, and retention incentives are appropriate for short-term staffing problems and do not confer the same ongoing impact on agency salary outlays associated with a special rate increase. Information on these flexibilities is available at http://www.opm.gov/oca/pay/HTML/factindx.asp.

6.   Adjustments Less Than the GS Adjustment

Agencies requesting special rate adjustments that are less than the January 2008 GS annual pay adjustment must submit a written justification and any applicable supporting data in accordance with OPM regulations and the instructions on OPM Form 1397. Such a request may be appropriate if you have determined that special rates are no longer necessary to prevent a serious staffing problem and you wish to phase out special rates by freezing or reducing the special rate supplement. (See also "Requests for Reduction or Termination of Special Rate Schedules.")

7.   Requests for Reduction or Termination of Special Rate Schedules

Agencies may request to reduce or terminate special rate schedules or grades of a schedule as part of the annual review process. These types of requests trigger the pay retention provisions of 5 U.S.C. 5363 for eligible employees. Therefore, OPM advises agencies to consider phasing out special rates that are no longer necessary by freezing or reducing special rate supplements without reducing the corresponding special rate. (A special rate supplement may be reduced without triggering pay retention as along as the employee's underlying base rate is increased simultaneously by a sufficient amount to prevent the employee's special rate from being reduced. In other words, if the increase in the underlying base rate exceeds the reduction in the special rate supplement, the employee will still have a net increase in his or her special rate.)

Termination of a special rate schedule may be appropriate if there are no longer any employees covered by that schedule. In this case, the affected agency or agencies should provide OPM Form 1397 indicating the termination of the schedule and that there are no covered employees.

8.   Certification

The head of each agency must document and certify his or her recommendation for any special rate adjustment not equal to the January 2008 GS annual pay adjustment or to terminate a special rate schedule and submit such certification to OPM on OPM Form 1397. A headquarters official designated to act on behalf of the head of the agency may sign the certification.

If there are substantial differences among agency recommendations for a particular special rate schedule, OPM will designate a lead agency (usually the agency with the largest number of covered employees). OPM generally will be the lead agency for worldwide/nationwide schedules. The lead agency will be responsible for obtaining a consensus from the major agencies involved and submitting a final recommendation for that schedule. We expect each agency covered by a schedule to cooperate with the designated lead agency in attempting to reach a consensus.

9.   New Requests Not Part of the Annual Review

Agencies should indicate how requests to establish a new special rate schedule submitted between now and December 31, 2007, relate to the anticipated January 2008 GS annual pay adjustment.

10.   Effective Date

Adjustments in special rate schedules resulting from this year's annual review will take effect on the same date as the 2008 general GS adjustment-i.e., the first day of the first applicable pay period beginning on or after January 1, 2008. If there is no general GS adjustment in 2008, the amount of the special rate adjustment will be zero, unless an adjustment greater than the GS adjustment is requested and approved. Any such adjustment will take effect on the first day of the first applicable pay period beginning on or after January 1, 2008. However, OPM may authorize new schedules and changes in existing special rate schedules at any time during the year if all the required criteria for establishing or adjusting special rates are met.

(Note: Incomplete requests for special rate supplement increases that are greater than the January 2008 GS annual pay adjustment may delay OPM review and approval beyond the first day of the applicable first pay period beginning on or after January 1, 2008.)

11.   For More Information

For more information on the 2007 annual review of special rates, contact the Center for Pay and Leave Administration by telephone at (202) 606-2858, by fax at (202) 606-0824, or by email at pay-performance-policy@opm.gov. Agencies contemplating a request for an adjustment greater than or less than the January 2008 GS annual pay adjustment or a reduction or termination of a special rate schedule should contact OPM's Center for Pay and Leave Administration for additional information and instructions.

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