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The General Schedule (GS) classification and pay system covers the majority of civilian white-collar Federal employees (about 1.5 million worldwide) in professional, technical, administrative, and clerical positions. GS classification standards, qualifications, pay structure, and related human resources policies (e.g., general staffing and pay administration policies) are administered by the U.S. Office of Personnel Management (OPM) on a Governmentwide basis. Each agency classifies its GS positions and appoints and pays its GS employees filling those positions following statutory and OPM guidelines.
The General Schedule has 15 grades--GS-1 (lowest) to GS-15 (highest). Agencies establish (classify) the grade of each job based on the level of difficulty, responsibility, and qualifications required. Individuals with a high school diploma and no additional experience typically qualify for GS-2 positions; those with a Bachelor’s degree for GS-5 positions; and those with a Master’s degree for GS-9 positions.
Each grade has 10 step rates (steps 1-10) that are each worth approximately 3 percent of the employee’s salary. Within-grade step increases are based on an acceptable level of performance and longevity (waiting periods of 1 year at steps 1-3, 2 years at steps 4-6, and 3 years at steps 7-9). It normally takes 18 years to advance from step 1 to step 10 within a single GS grade if an employee remains in that single grade. However, employees with outstanding (or equivalent) performance ratings may be considered for additional, quality step increases (maximum of one per year).
A new GS employee is usually hired at step one of the applicable GS grade. However, in special circumstances, agencies may authorize a higher step rate for a newly-appointed Federal employee based on a special need of the agency or superior qualifications of the prospective employee. Current Federal employees who move to a GS position and are not considered newly appointed may have pay set above step 1 based only on a previous Federal civilian rate of pay (i.e., maximum payable rate rule) under the gaining agency’s policies.
GS employees may advance to higher grades by promotion at certain intervals (generally after at least a year), as determined by OPM regulations and qualification standards and agency policies, up to the full promotion potential advertised in the job announcement. After that, competition under merit system principles is necessary to advance to a higher GS grade. Generally, a GS promotion increase is equal to at least two steps at the GS grade immediately before promotion to the higher GS grade.
The GS base pay schedule is usually adjusted annually each January with an across-the-board pay increase based on nationwide changes in the cost of wages and salaries of private industry workers. Most GS employees are also entitled to locality pay, which is a geographic-based percentage rate that reflects pay levels for non-Federal workers in certain geographic areas as determined by surveys conducted by the U.S. Bureau of Labor Statistics. There are currently 34 locality pay areas, which cover the lower 48 States and Washington, DC, plus Alaska, Hawaii, and the U.S. territories and possessions. Thirty-one of the locality pay areas cover large metropolitan areas (e.g., Los Angeles, New York, Washington, DC), two cover entire States—Alaska and Hawaii, and the remainder of the United States and its territories and possessions are included in the catch-all Rest of U.S. (RUS) locality pay area. GS employees in foreign areas are not eligible for locality pay. The President and Congress may make changes in the otherwise applicable across-the-board and locality pay adjustments.
Because of serious difficulties in staffing certain occupations at GS grade levels in certain geographic areas, OPM may approve special rates which are higher than the normal GS rates.
The President establishes the Council to include three seats for experts in labor relations and pay policy and six for employee organizations representing large numbers of General Schedule employees. The Council submits annual recommendations on the locality pay program to the President's Pay Agent. The Council's recommendations cover the establishment or modification of pay localities, the coverage of salary surveys used to set locality pay, the process for making pay comparisons, and the level of comparability payments that should be made. Council recommendations to the Pay Agent and minutes from Council meetings can be found below.
Section 5304(d)(1) of title 5, United States Code, authorizes the President to designate a Pay Agent. In Executive Order 12748, the President designated the Secretary of Labor and the Directors of the Office of Management and Budget and the Office of Personnel Management to serve as the President's Pay Agent. Under section 5304 of title 5, the Pay Agent provides for Federal Salary Council meetings, considers the recommendations of the Federal Salary Council, defines locality pay areas, and submits an annual report to the President on the locality pay program. The report compares rates of pay under the General Schedule to non-Federal pay, identifies areas in which a pay disparity exists and specifies the size of the disparity, makes recommendations for locality rates, and includes the views of the Federal Salary Council.