Guidance on Miscellaneous Pay Changes

The Office of Personnel Management has issued guidance to agencies on its recent interim regulations carrying out various changes ordered by last year’s Federal Workforce Flexibility Act. The act sought to correct various pay administration anomalies that produced unfair pay reductions or unwarranted pay increases for employees in certain situations, OPM said, many of them attributable to the fact that the former rules generally treated special rates as rates of basic pay for pay administration purposes, but did not treat locality rates as rates of basic pay. For example, locality pay is now considered in applying various pay-setting rules (such as maximum payable rate, promotion, transfer, pay retention, etc.) and a locality rate may not be paid on top of a retained rate.