Pay freeze won’t halt all raises

Some performance-based pay raises and other salary adjustments are not subject to the recently announced two-year pay freeze, according to the Office of Personnel Management.

President Obama on Dec. 22, 2010, issued an executive order freezing civilian pay for two years, though workers still will qualify for promotions and step increases. In a Dec. 30 memo sent to agency heads, OPM Director John Berry clarified which types of raises are excluded from the freeze.

The freeze will affect nearly 2 million employees under the General Schedule, Executive Schedule, Senior Executive Service, Senior Foreign Service, senior-level and scientific and professional, prevailing rate, and other executive branch pay systems and schedules, Berry wrote. It will not, however, affect military personnel, U.S. Postal Service workers or Postal Regulatory Commission employees.

According to the memo, the pay freeze does not apply to:

• Performance awards and bonuses; recruitment, relocation and retention incentives; and premium payments such as overtime pay;
• Promotions, periodic within-grade step increases based on fully successful level of performance, and quality step increases for outstanding performance;
• Adjustments in foreign areas to maintain a constant salary rate in U.S. dollars, or local currency, or to respond to foreign labor laws; and
• Pay-setting flexibilities, such as the GS superior qualifications and special needs pay-setting authority for newly appointed employees under Title 5 of the Code of Federal Regulations 531.212 and the GS maximum payable rate rule under 5 CFR 531.221.

The freeze also does not apply to any increase that is required by a collective bargaining agreement already in effect. If an agency decides to exclude a specific pay system, pay schedule or employee category from the pay freeze, then the agency must report its determination to OPM, the memo stated.