Pay Cap Memo Issued

The Office of Personnel Management has sent agencies a memo carrying instructions on pay caps for members of the senior executive service and other employees in top-level pay systems, such as the senior level and scientific or professional positions. Total compensation for such employees-including salaries and various bonuses for which many of them are eligible-traditionally has been capped at the Executive Level I rate (currently $171,900). The memo notes that under legislation enacted last year PL 107-296) that limit rises to the level of the vice-president’s salary (currently $198,600), but only if OPM and the Office of Management and Budget certify that the agency has a performance appraisal system that “makes meaningful distinctions based on relative performance.” The memo said that OPM and OMB will issue regulations and guidance on the requirements for obtaining certification of agency performance appraisal systems so that they may use the higher aggregate pay limitation, but until an agency’s performance appraisal system has been certified under the new regulations, the aggregate limitation on pay for all employees will remain at the rate for level I of the Executive Schedule.