A Presidential Memorandum dated December 22, 2010, entitled “Freezing Federal Employee Pay Schedules and Rates That Are Set By Administrative Discretion,” provides that Executive agencies should suspend increases to pay schedules set by Administration discretion in 2011 and 2012. Also, under section 147 of the Continuing Appropriations Act, 2011 (Pub. L. 111-242), as amended by section 1(a) of the Continuing Appropriations and Surface Transportation Extensions Act, 2011 (Pub. L. 111-322), General Schedule pay rates were frozen in 2011 and 2012. (Generally, special rate schedules have been adjusted by the same amount as the General Schedule general increase.) Based on these actions, special rate schedules under 5 U.S.C. 5305 are not being increased in January 2012, except special rate schedules in nonforeign areas that are subject to special adjustment pursuant to the Non-Foreign Area Retirement Equity Assurance Act of 2009 (sections 1911-1919 of Public Law 111-84, October 28, 2009) or in extraordinary circumstances.
In order to comply with sections 1913 and 1915(b)(1) of Public Law 111-84, the above pay rates include an additional adjustment (above the special rate that would otherwise apply) equal to 16.51 percent of the General Schedule base rate (see http://www.opm.gov/oca/12tables/html/gs.asp), which is the full amount of the locality pay percentage authorized for the State of Hawaii locality pay area in 2012. (In 2010, an additional adjustment equal to 4.72 percent of the General Schedule base rate applied; in 2011, the additional adjustment increased to 11.01 percent along with further reduction of the applicable cost-of-living allowance.) This additional adjustment is added after all other calculations are done, including the application of the EX-IV statutory pay cap under 5 U.S.C. 5305(a)(1) to the special rate before the additional adjustment. The special rate incorporating the additional adjustment is not subject to the statutory pay cap until the last day of the transition period, January 1, 2012. Immediately after making the final additional adjustment on January 1, 2012, the EX-IV statutory pay cap ($155,500) will be applied and special rate schedules will reflect that cap. Any employee rate above the cap will be converted to a retained rate, as required by section 1913(c) of Public Law 111-84.
