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U.S.
Office of Personnel Management
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Thank you, Fred [Nesbitt], for that kind introduction.
It is a great pleasure to be here this morning to discuss how the Clinton Administration is bringing fairness and clarity to compensation for federal fire fighters.
I am going to explain what the difficulty is, and briefly discuss how we at OPM propose to fix it. But before I do that -- since the vast majority here are not in federal service -- I must give you a caveat:
This is not your parents federal government.
In saying that, I mean no disrespect to the millions who have served honorably and well in Americas civil service. I most certainly am not disparaging our parents, who built upon the system initiated by the Founders and took the United States from being a nation among many equals to the position of being the most successful nation in the history of the Earth.
But I do mean that the federal civil service was in need of a good overhaul, and thanks to the President and Vice President we are in the process of doing precisely that.
The issue of fire fighters pay is a good example of a work in progress.
When President Bill Clinton came to office in 1993 and tasked Vice President Al Gore with creating a government that works better and costs less for the American people, they had the vision to immediately see -- and characterize -- federal workers as being good people trapped in a bad system.
The subject here is pay for federal fire fighters. I want to illustrate my point about good people and bad systems by explaining the present pay situation as succinctly and clearly as possible. And that is a challenge.
Under current law, federal firefighters are entitled to the same basic pay as other General Schedule employees for the first 40 hours per week.
In recognition of their special work schedules, firefighters are normally compensated by STANDBY DUTY PAY, a special form of premium pay.
This special premium pay is designed to compensate employees with extended regularly scheduled tours of duty involving substantial time in a standby status.
Employees receiving standby duty pay are barred by law from receiving any other premium pay, except overtime pay for irregular overtime work in excess of the regularly scheduled tour of duty.
A standby percentage rate of no more than 25 percent is established based upon several factors, including hours of actual work and duty on Sunday, holidays and at night.
Firefighters who are non-exempt under the Fair Labor Standards Act, or FLSA, receive one-half of the FLSA hourly regular rate for all regularly scheduled overtime hours. The FLSA hourly regular rate is computed by dividing the sum of basic pay plus standby duty pay by the number of regularly scheduled hours. For irregular overtime hours, firefighters receive one-and-one-half times the FLSA hourly regular rate.
Now, is that CLEAR?
Believe it or not -- and I wish it were not true -- I could go on talking like that for the next 15 minutes regarding present pay formulas for federal fire fighters.
But I think youve suffered enough.
From that sample you can quickly grasp the fundamental complexities underlying the situation.
So what are the problems with the current compensation system?
In a nutshell, these are the factors:
First -- and obviously from what you have just been exposed to -- the system is too complex.
Second, our federal fire fighters tend to believe the computation of overtime pay is unfair under provisions of the Fair Labor Standards Act -- which became applicable to federal employees in 1974.
Obviously, no right-thinking employer wants a pay formula that is not credible in the eyes of its employees.
Third, pay is not directly proportional to the number of hours worked.
Fourth, receiving a promotion can actually result in losing pay even when an employee continues to work the same number of hours after promotion.
Fifth, the pay structure is such that during training periods the fire fighter can lose pay because work hours are reduced.
As they say in the space program -- Houston, we have a problem.
But Im pleased to say we also have a solution.
Before I delve into that fix, let me explain a little further how we got into this pickle.
I hasten to assure you that this situation was created by good intentions. However, we all know to where the road paved with good intentions leads.
Basically, heres what happened.
In 1974, the Fair Labor Standards Act -- FLSA -- provisions regarding overtime pay were forced to fit into a pre-existing federal pay system. While FLSA benefited many employees, it also complicated many pay computations -- especially for fire fighters. It also resulted in anomalies such as the loss of pay upon promotion for certain firefighters even if they continued working the same number of hours.
Overtime pay in the federal system also depends upon standby duty pay; and there is not a direct proportional relationship between total hours worked and the amount of basic and standby pay received.
You are all aware of the special circumstances and staffing hours required by the nature of fire fighting. Many of you probably are not all fully aware of the special circumstances under which federal agencies and employees labor -- namely, we must comply with laws, laws which may be layered, one upon another, over time and have unintended consequences -- and laws that may have to be altered by Congressional action.
We also have to build coalitions among what we call stakeholders -- employees, managers, unions, legislators, and others with a stake in the issue.
All this immensely complicates the process of change.
So, for about two decades, this situation was unresolved. And that was simply unacceptable.
Now, let me discuss how we propose to get to where we need to go with the federal fire fighters compensation system.
First, let me assure you that staff at OPM has long been aware that something needs to be done and has been examining solutions. In 1991 and 1992, OPM studied fire fighter pay as part of a broader classification and pay study of law enforcement and protective occupations.
However, it was not possible at that time to form consensus regarding a fix.
Last fall, I discussed this lingering problem with the White House. And -- in keeping with the Administrations highly successful reinvention of government efforts -- I was asked to take the lead in developing a firefighter pay reform proposal that would be acceptable to fire fighter unions, employees and employing agencies.
Let me emphasize that previous proposed fixes had not gone forward because of the difficulty in getting all stakeholders together. And after 20-plus years of nothing happening and various factions setting their positions in long-hardened concrete, getting everyone together was a monumental task. This White House, when fully made aware of the situation, cut the Gordian Knot.
It was the awareness and involvement of the Administration that allowed us to move beyond intramural squabbles to focus on results. The desired result was designing a fairer, simpler pay system for fire fighters that would result in no loss of pay for anyone, and would increase pay for most.
With the White Houses unique ability to capture everyones attention, and insistence that all camps focus on this imperative, OPM did it. We have the first step ready to go, forged in partnership with all stakeholders.
In working on this proposal, we necessarily focused first on fixing the problems of pay complexity and disproportionality -- and not on the issue of total compensation for federal fire fighters.
The question about how much total pay fire fighters should receive is a broad one that is inextricably linked with overall pay system reform for the entire federal government. We are working on that issue, as well.
The Administration is committed to finding solutions that balance the Presidents policy priorities with his concern for federal employees and the vital work they accomplish for the American people.
At this point, we have an initial legislative fix ready to go into the Congressional stream of business. I wish we could tell you that it already had been submitted, but in fact we are seeking the proper venue to help this proposal succeed during the abbreviated current session of Congress. We do expect it will be introduced in the very near future, in a way that gives it the best chance of passage.
You will receive a fuller briefing on the proposal itself following my remarks. However, let me highlight the basic elements of our proposal.
First, standby pay would be eliminated, and fire fighter pay would be calculated on an hourly rate basis.
Second, firefighters working 24-hour shifts would be paid a special fire fighter hourly rate that reflects the number of non-overtime hours in the firefighter work year. Fire fighters would receive one-and-one-half times the hourly rate for overtime hours. This would result in a 9 percent increase in pay for the typical 72-hour-per-week firefighter.
Third, for the typical firefighter with a 72-hour workweek, retirement benefits would increase by about 9 percent.
Fourth, the problem of losing pay when being promoted would be eliminated for supervisors who work the same number of hours as they did formerly, because the pay COMPUTATION would be virtually identical for both supervisory and non-supervisory fire fighters.
Fifth, fire fighters who do not typically work 24-hour shifts would be paid the regular General Schedule rate for the first 40 hours; then be paid at the fire fighter rate for additional hours up to 53. Above 53 hours, they would receive one-and-one-half-times the fire fighter rate.
Finally, no regular pay would be lost during employer-mandated training periods.
Thats it. Much simpler, more rational, and more equitable, than the current system. It is especially simpler for the typical 24-hour shift firefighter. Pay would be based on a single hourly rate, with an appropriate time-and-one-half premium for overtime hours.
The total cost would be an additional $42 million. Most of that would be borne by the Department of Defense, which employs 94 percent of the 9,500 affected federal fire fighters.
OPM understands that this does not address all the concerns of federal fire fighters. But it is an excellent start.
As a next step, I have agreed to establish a working group to examine other issues -- such as classification standards and bonuses for certain skills. This working group would involve those most concerned, including fire fighters, their unions, OPM, the Department of Defense and Veterans Affairs.
And that is where we are today in regard to this most important issue.
This saga underscores some very important principles about making change in Americas civil service.
First, partnership works wonders when everyone focuses on the result, and not on interim difficulties.
Partnership is a keystone of the Presidents and Vice Presidents efforts to create a government that costs less and works better for the American people.
Second, leadership at the highest level can slice through difficulties by reminding all involved precisely where that focus should be placed.
And third, successful reform begins by paying attention to the people who deliver the goods. No one knows more or better how to resolve the situation than those who deal with it on a daily basis. That too is a foundation of how the Administration is making government work better.
I appreciate the opportunity to discuss this situation with you. It was a pleasure to be able to attend your conference. I look forward to better results for our ultimate Stakeholders -- our customers -- the American people, as we continue to work with the President and Vice President to create the federal workforce for the new millennium.
Keep your eyes focused on the necessary end, remember who we are working for and why, and all is possible.
Thank you.
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Web page created 25 March 1998