The overtime pay gap

Are federal managers underpaid for overtime?

Under the current law, which has been in place since 1966, federal supervisors' and managers' overtime pay is capped at one and a half times the rate of pay for GS-10, Step 1 employees. The cap also affects some engineers and other professionals who are not guaranteed full time-and-a-half for overtime under the Fair Labor Standards Act.

So a GS-12 supervisor makes less during overtime than GS-11 subordinates. While the GS-12 supervisor earns one and a half times the rate of pay for GS-10, Step 1, the GS-11 employees (protected by the Fair Labor Standards Act) receive the full one and a half times their GS-11 hourly rates.

To many federal managers, that's just plain unfair, so they've been lobbying Congress for years to lift the pay cap. Rep. Tom Davis, R-Va., responded last year by proposing to raise the cap from GS-10, Step 1, to one-and-a-half times the rate of pay for GS-15, Step 1. That proposal has proven too rich for lawmakers' blood.

Now Davis has teamed up with Reps. Elijah Cummings and Connie Morella of Maryland and the Office of Personnel Management to draft a new proposal to fix the overtime cap.

Under the bill (H.R. 1770), the cap would stay at GS-10, Step 1. But managers and professionals exempt from the Fair Labor Standards Act would be guaranteed that they would always receive at least their regularly hourly pay rate during overtime hours. So anyone who makes more than one-and-a-half times the rate of pay for GS-10, Step 1 employees would earn their normal hourly salary during overtime.

"Like the rest of us, federal managers and supervisors only have their kids and families for a certain amount of time," Cummings said when he introduced H.R. 1770 on May 12. "They deserve to be fairly compensated so that they can adequately provide for their loved ones."

The bill would also raise the total compensation cap for managers and professionals. Right now, the combined total of base pay plus overtime and other premium pay cannot exceed the maximum bi-weekly pay for GS-15, Step 10 employees. H.R. 1770 would allow managers and professionals to make up to 150 percent of GS-15, Step 10 pay, the same cap that applies to law enforcement officers (currently $4,243.20 per pay period).

"The overtime pay proposal is a long overdue correction that would be consistent with the pay practices of many non-federal employers," said Office of Personnel Management Director Janice Lachance.

But Ned Lynch, senior research director at the House Government Reform Civil Service Subcommittee (through which H.R. 1770 must pass), questioned whether employers outside Uncle Sam's domain pay managers overtime rates.

"It simply doesn't happen in the private sector," Lynch said.

Lynch also pointed out that OPM estimates the bill would cost $100 million a year. The Clinton administration opposes a bill correcting retirement enrollment errors for up to 20,000 federal employees (H.R. 416) that would have a one-time cost of $100 million because it says even a one-time $100 million draw on agencies' budgets could lead to layoffs.

"We'd hate to see an overtime increase for relatively high paid federal managers and employees result in RIFs [reductions-in-force] for their colleagues," Lynch said.

In addition, the administration is studying total federal employee compensation, so an overtime pay change now may be premature, Lynch said.