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By: FEDweek StaffFollowing is a memo from OPM calling agencies’ attention to several special pay authorities that were either created or extended by laws enacted late in 2022.
This is to inform you of several legislative changes and extensions affecting Federal employee pay and certain benefits. The changes resulting from the enactment of the James M. Inhofe National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2023 (Public Law 117-263, December 23, 2022) and the Consolidated Appropriations Act, 2023 (Public Law 117-328, December 29, 2022) are summarized below.
I. James M. Inhofe NDAA for FY 2023 (Public Law 117-263, December 23, 2022)
Section 601 – Reserve Income Replacement Program
Section 601(a) amends 37 U.S.C. 910(g) to extend the expiration date for the Reserve Income Replacement Program from December 31, 2022, to December 31, 2023.
The Reserve Income Replacement Program is administered by the Department of Defense and provides income replacement payments for certain reserve component members experiencing extended and frequent mobilization for active-duty service. (This amendment does not affect the reservist differential authority under 5 U.S.C. 5538, which is a separate program for Federal employees. A Federal employee who is entitled to a reservist differential may not receive payments under 37 U.S.C. 910 for the same period. See the reservist differential fact sheet for additional information.
Section 1102 – Modification and 1-Year Extension of Authority to Waive Annual Limitation on Premium Pay and Aggregate Limitation on Pay for Certain Federal Civilian Employees Working Overseas
Section 1102(a)(2) extends to calendar year (CY) 2023 the authority provided in section 1101 of the Duncan Hunter NDAA for FY 2009 (Public Law 110-417, October 14, 2008), as amended, for the head of an agency to waive the normally applicable premium pay cap established in 5 U.S.C. 5547. This waiver authority is modified in 2023 to apply to certain civilian employees who perform qualifying work while in any overseas location. In addition, section 1102(a)(1) eliminates the previous geographic requirement that such work be performed in an area (1) of responsibility of the United States Central Command (CENTCOM) or (2) formerly in the CENTCOM area of responsibility but which has been moved to the area of responsibility of the Commander of the United States Africa Command (AFRICOM). The annual limitation on basic pay and premium pay allowed under the waiver authority in CY 2023 is the officially established annual salary rate for the Vice President under 3 U.S.C. 104 ($272,100 in 2023). In addition, when an employee is granted a section 1101(a) waiver, any pay in addition to basic pay received for service during the waiver period is not counted as compensation in applying the aggregate limitation on pay under 5 U.S.C. 5307.
Under the amended law, eligible employees may be performing covered work in any overseas location. The change in coverage resulting from dropping the geographic restrictions will apply prospectively starting on the date of enactment (i.e., December 23, 2022). Any work meeting the new coverage conditions performed on or after this date would be covered by the amended law. Any past work that was not covered before the date of enactment is still not covered; there is no retroactive effect. In considering application to CY 2022, note that the annual premium pay cap is applied by calendar year to payments that are payable in the given calendar year. Any work performed in CY 2022 after enactment of Public Law 117-263 will have a payment date in CY 2023. Therefore, premium payments payable in CY 2022 are not affected.
Section 1101(d) of Public Law 110-417 continues to provide the U.S. Office of Personnel Management (OPM) Director with the discretion to issue regulations for this waiver authority. OPM does not currently plan to issue regulations. However, each agency should establish policies for using this waiver authority if it has covered employees. To ensure agencies apply this discretionary authority consistently, we have coordinated with the Department of Defense and the Department of State to develop the attached summary of key elements agencies should include in their policies implementing the waiver authority (Attachment). The attached summary includes additional information on employee coverage, approval criteria, and special instructions on applying the waiver authority to employees working in Iraq.
Section 1103 – 1-Year Extension of Temporary Authority to Grant Allowances, Benefits, and Gratuities to Civilian Personnel on Official Duty in a Combat Zone
Section 1103 grants the head of an agency the discretionary authority until the end of FY 2024 (i.e., September 30, 2024), to provide an individual employed by, or assigned or detailed to, the agency, allowances, benefits, and gratuities comparable to those provided by the Secretary of State to members of the Foreign Service under section 413 and chapter 9 of title I of the Foreign Service Act of 1980. The employee must be on official duty in Pakistan or a combat zone, as defined by section 112(c) of the Internal Revenue Code of 1986.
Section 9717 – Locality Pay for Federal Employees Working Overseas Under Domestic Employee Teleworking Overseas Agreements
Section 9717 authorizes certain employees working overseas under a Domestic Employee Teleworking Overseas (DETO) agreement to receive a special locality payment calculated as the lesser of (1) the amount of locality pay the employee would have been paid under 5 U.S.C. 5304 or 5304a if the employee’s official duty station had not been changed to an overseas location under the applicable DETO agreement or (2) the amount of overseas locality pay the employee would be paid if the employee were an eligible member of the Foreign Service (which, under current law, is two-thirds of the locality pay authorized for a duty station within the District of Columbia). Locality payments under section 9717 must begin to be paid (i.e., take effect) no later than 60 days after the date of enactment of the NDAA for FY 2023 (February 21, 2023) and are subject to the same terms and conditions as locality pay under 5 U.S.C. 5304 or 5304a.
While section 9717 did not give OPM authority to regulate or administer the DETO locality pay program, OPM has coordinated with the Department of State and the Department of Defense to provide information to agencies to assist them in implementing the program. See the attached information sheet on Domestic Employees Teleworking Overseas (DETO) – Locality Pay for additional guidance.
Section 11706 – Improving Professional Mariner Staffing
Section 11706(a) amends subtitle E of the National Oceanic and Atmospheric Administration (NOAA) Commissioned Corps Act of 2002 (33 U.S.C. 3071 et seq.) by adding a new section 269B providing for shore leave for professional mariners. Section 269B(b) authorizes the granting of shore leave for “professional mariners” at a rate of 4 days per pay period. As defined by section 269B(c), a “professional mariner” is “an individual employed on a vessel of the [National Oceanic and Atmospheric] Administration who has the necessary expertise to serve in the engineering, deck, steward, electronic technician, or survey department.” A qualifying mariner serving in a temporary promotion position aboard a vessel may be paid the difference between such mariner’s temporary and permanent rates of pay for leave accrued while serving in the temporary promotion position. As provided by section 269B(a), the Under Secretary of Commerce for Oceans and Atmosphere and NOAA Administrator may prescribe regulations relating to shore leave for professional mariners without regard to the requirements of 5 U.S.C. 6305 and related OPM regulations in 5 CFR part 630, subpart G.
II. Consolidated Appropriations Act, 2023 (Public Law 117-328, December 29, 2022)
Section 440 of Division G – Continued Premium Pay Limitation Waiver Authority for Emergency Wildland Fire Suppression Activities
Section 440 extends through CY 2023 the temporary authority found in section 1701 of division B of the Extending Government Funding and Delivering Emergency Assistance Act (Public Law 117-43, September 30, 2021), as amended by section 601 of division HH of the Consolidated Appropriations Act, 2022 (Public Law 117–103, March 15, 2022), requiring the Departments of the Interior and Agriculture to waive the premium pay limitation under 5 U.S.C. 5547(a) for wildland firefighters and other fire management response officials performing services related to emergency wildland fire suppression activities. Under this authority the aggregate of a covered employee’s basic pay and premium pay for calendar year 2023 may not exceed the rate payable for level II of the Executive Schedule ($212,200 in 2023). Any premium pay not applied to the premium pay cap under 5 U.S.C. 5547(a) will not apply towards the aggregate limitation on pay under 5 U.S.C. 5307.
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