Federal Manager's Daily Report

OPM has issued guidance to implement part of the $2 trillion Coronavirus relief bill signed last month – the CARES Act, that will allow federal employees to earn premium pay such as overtime, incentive or hazard pay, above their normal biweekly and annual pay limits.

It’s up to the agency head to decide which forms of additional compensation qualify for premium pay waivers, and the pay must be for work “primarily related to the preparation, prevention, or response to COVID-19,” according to a memo from acting OPM director Michael Rigas.


Under the first of two provisions on premium pay – section 16003, premium pay won’t be counted toward normal biweekly and annual pay limits. However, that’s only if the pay is funded by FEMA, either directly or through reimbursement. Overall, an employee’s aggregate annual pay cannot exceed level II of the Executive Schedule ($197,300 for 2020). The annual total would be calculated from January 1, 2020 through the end of the fiscal year.

Waivers issued under the second provision – section 18110, do not have the same FEMA-funding requirement as the first provision, but the annual total pay figure would be counted from February 2, 2020 through the end of the fiscal year.

Further, “any additional premium pay that is paid as a result of the section 18110 authority may not be considered basic pay of the covered employee for any purpose (including premium pay that is normally creditable as basic pay for retirement or any other purpose) and may not be used in computing a lump-sum payment to the covered employee for accumulated and accrued annual leave,” Rigas said in the memo. (OPM director Dale Cabaniss quit in March.)

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