Attachment 1 to CPM 97-8
1997 ANNUAL REVIEW INSTRUCTIONS
The Office of Personnel Management (OPM) is conducting its annual review of special salary rates authorized by 5 U.S.C. 5305 and 5 CFR part 530, subpart C. Special rates are paid for specific occupations, grades, and locations to alleviate existing or likely recruitment or retention problems. All special salary rate authorizations in effect as of September 30, 1997, are covered by the 1997 annual review.
The deadline for submitting all annual review materials to OPM is September 30, 1997, unless an extension is approved by OPM. The submissions should be sent to the following address:
U.S. Office of Personnel Management
Office of Compensation Policy
Compensation Administration Division
Attn: Special Rates Annual Review Team
1900 E Street NW., Room 7H31
Washington, DC 20415
3. Agency Reviews
OPM is required to review special rate authorizations in anticipation of salary adjustments to be made in the relevant underlying statutory pay schedules to determine whether an adjustment is necessary. In conducting this review, OPM relies on the reviews conducted by agencies employing special rate employees. In conducting their reviews, agencies must consider the following factors (consistent with OPM's regulations in 5 CFR 530.304):
- the applicable staffing and labor market factors (to determine whether adjustments in special rate pay schedules are warranted);
- the former non-special pay rates of the special rate employees (to ensure that any adjustment in the special rates of pay would not cause those rates to fall below the non-special rates of pay to which the special rate employees would otherwise have been entitled);
- the likelihood that the factors leading to a statutory adjustment in pay will affect special rate employees as well; and
- other special rate adjustments that occurred prior to the date of the anticipated statutory pay adjustment.
Agencies must determine whether to recommend a percentage adjustment equal to the across-the-board adjustment that will be applied to the General Schedule in 1998. If, based on its review, an agency determines that conditions have changed to the extent that a particular special rate table warrants an adjustment that is less than or greater than the anticipated General Schedule adjustment, it may recommend a different adjustment. However, in such cases, the agency is required to submit certain supporting data, consistent with OPM regulations and the instructions on OPM Form 1397. (See Attachment 2 and section 4 of this attachment.)
4. OPM Form 1397
OPM Form 1397, Worksheet for Special Salary Rate Requests, is used for multiple purposes--e.g., to submit new requests for special rates, to request termination of a special rate schedule, and to document an agency's annual review of existing special rates. (See Attachment 2.) When using OPM Form 1397 for annual review purposes, an agency is required to identify the special rate schedule being reviewed, to specify the adjustment it is requesting for that schedule, to provide certain staffing-related data, and to certify its staffing-based need and ability to pay for any requested special rate increase. Note: the long version of OPM Form 1397 is not available on this web site.
Staffing data should cover the period June 2, 1996, through May 31, 1997.
Agencies requesting special rate increases equal to the across-the-board 1998 General Schedule adjustment are not required to submit full staffing data. They need only report the number of ending authorized positions for the grades covered. For the convenience of agencies, submissions of this type may be made on the short form version of OPM Form 1397. (See Attachment 2.)
Agencies requesting adjustments greater than the across-the-board 1998 General Schedule adjustment are required to submit additional data, in accordance with OPM regulations and the instructions on OPM Form 1397. Agencies may also be required to submit salary survey data. (Agencies are advised to contact OPM before conducting salary surveys. For example, salary surveys are not required for existing nationwide or worldwide authorizations or for existing local clerical authorizations located within the continental United States.)
Agencies requesting adjustments that are less than the across-the-board 1998 General Schedule adjustment (including a zero adjustment) are required to submit a written justification and any applicable supporting data, in accordance with OPM regulations and the instructions on OPM Form 1397. Such a request may be appropriate if the agency has determined that special rates are no longer necessary to prevent a serious staffing problem and wishes to phase out special rates by granting zero adjustments. (See 5 CFR 530.304-305.) Also, if special rates have been surpassed by locality rates, it would be appropriate for an agency to take this fact into account in considering the need for adjustments in those special rates.
The head of the department or agency must personally sign the certification for a special rate adjustment when (1) an agency is proposing to increase the special rate by more than the amount of the General Schedule increase; (2) the special rate applies to 1,000 or more positions; and (3) the increase in total expenditures (comparing the cost of the current special rates before the adjustment with the cost of the projected special rates) is $4 million dollars or more. In all other cases, certifications may be signed by a headquarters official designated to act on behalf of the head of the department or agency.
Several years ago, in an effort to expedite the data collection process for the annual review, we revised our procedures so that data no longer had to be submitted to OPM through a lead agency. Again, this year, each agency will be responsible for submitting data on OPM Form 1397 directly to OPM for each authorization that covers an agency. However, if there are substantial differences in agency recommendations when data are received, OPM will designate a lead agency (usually the agency with the largest number of covered employees), which will be responsible for obtaining a consensus from the major agencies involved and submit to OPM a final recommendation for that authorization. OPM will be the lead agency for worldwide/ nationwide authorizations and will contact the major agencies to determine the degree of consensus for adjusting these authorizations, if necessary. Each agency covered by an authorization is expected to cooperate with the designated lead agency in attempting to reach a consensus.
7. Effective Date
Adjustments in special rates resulting from this year's annual review will take effect on the same date as the across-the-board General Schedule pay adjustment--i.e., the first day of the first applicable pay period beginning on or after January 1, 1998--unless otherwise specified by the agency and approved by OPM. If there is no across-the-board General Schedule adjustment in 1998, the amount of the special rate adjustments will be zero, unless an increase greater than the General Schedule increase is requested and approved. Any such increase will take effect on the first day of the first applicable pay period beginning on or after January 1, 1998. Agencies are reminded, however, that new authorizations and changes in existing special rates may be made at any time during the year if all the normal criteria for establishment or adjustment of special rates are met.
8. New Requests Not Part of the Annual Review
Requests to establish a new special rate schedule submitted between October 1 and December 31, 1997, should indicate how the requested special rates relate to the anticipated 1998 General Schedule adjustment.
9. Requests for Reduction or Termination of Special Rates
A request to reduce or terminate special rates may be submitted as part of the annual review process. However, under current law, the reduction or termination of a special rate may result in an increase in an employee's total pay. This is because the reduction or termination of special rates triggers the pay retention provisions of 5 U.S.C. 5363 and may result in locality pay being paid on top of employees' current pay (if converted to a General Schedule rate or a retained rate). Therefore, OPM advises agencies to consider phasing out special rates that are no longer necessary by providing for annual adjustments that are less than the across-the-board General Schedule pay increase. Termination of a special rate schedule may be appropriate if there are no longer any employees covered by that schedule. In this case, the affected agency or agencies should provide a letter signed by an authorized official that requests the schedule termination and explains that there are no covered employees. (Completion of OPM Form 1397 is not required.) Any agency contemplating submitting a request for reduction or termination of a special rates schedule with covered employees should contact OPM's Compensation Administration Division for additional information and instructions.
Page created 2 July 1997