December 21, 1999

MEMORANDUM FOR DIRECTORS OF PERSONNEL AND AGENCY PAYROLL OFFICES (CPM 99-7)

On December 21, 1999, the President signed an Executive order on the January 2000 pay adjustments. (See Attachment 1.) This memorandum reviews relevant portions of the Executive order and provides general information on the 2000 pay adjustments.

The General Schedule and Other Statutory Pay Systems

The Executive order provides for an across-the-board increase of 3.8 percent in the rates of basic pay for the statutory pay systems--the General Schedule (GS), the Foreign Service Schedule, and certain schedules for the Veterans Health Administration of the Department of Veterans Affairs--in accordance with section 646 of the Treasury, Postal Service and General Government Appropriations Act, 2000 (Public Law 106-58, September 29, 1999).

The Senior Executive Service and the Executive Schedule

The Executive order reflects a decision by the President to increase the rates of basic pay for members of the Senior Executive Service (SES) by 3.8 percent (rounded to the nearest $100) at SES levels ES-1 through ES-3 and by 3.6 percent (rounded to the nearest $100) at ES-4. Since the maximum rate of basic pay for SES members is limited by law to the rate for level IV of the Executive Schedule, which is being increased to $122,400, the rates of basic pay for ES-5 and ES-6 will be increased by approximately 3.4 percent. Executive Schedule pay levels also will be increased by approximately 3.4 percent.

Administrative Law Judges

Public Law 106-97, November 12, 1999, amended 5 U.S.C. 5372 to provide the President with authority to adjust the rates of basic pay for administrative law judges (ALJs) at the time of a pay increase for the statutory pay systems. The Executive order reflects a decision by the President to increase the rates of basic pay for ALJs at levels AL-2 and AL-3 by 3.8 percent (rounded to the nearest $100). The rate of basic pay for AL-1 will be increased by approximately 3.4 percent, since that rate is capped at the rate of basic pay for level IV of the Executive Schedule.

Other Executive Level Positions

Pay rates for certain other employees are linked to the Executive Schedule. The rates of basic pay for Board of Contract Appeals (BCA) members are calculated as a percentage of the rate for level IV of the Executive Schedule. (See 5 U.S.C. 5372a.) Therefore, BCA rates of basic pay will be increased by approximately 3.4 percent.

Also, the maximum rate of basic pay for senior-level (SL) and scientific or professional (ST) positions will be increased by approximately 3.4 percent (to $122,400). The minimum rate of basic pay for SL/ST positions is equal to 120 percent of the minimum rate of basic pay for GS-15 and thus will be increased by 3.8 percent (to $93,137) because of the 3.8 percent across-the-board GS pay adjustment. Subject to these minimum and maximum rates, pay adjustments for SL/ST employees are determined by the employing agency. (See 5 U.S.C. 5376.)

Effective Date

The new basic pay schedules for GS, SES, and SL/ST positions will become effective on the first day of the first applicable pay period beginning on or after January 1, 2000. Increases in locality payments (discussed below) are effective at the same time.

Locality Payments

The President's Executive order establishes the amounts of the 2000 locality payments for GS employees.

The President's Pay Agent (the Secretary of Labor, the Director of the Office of Management and Budget, and the Director of the Office of Personnel Management) has decided to extend the 2000 locality payments to the same Governmentwide and single-agency categories that were authorized to receive the 1999 locality payments. (See December 7, 1999, President's Pay Agent memorandum to agency heads on the extension of locality payments to non-General Schedule employees.) The Governmentwide categories include the SES, employees in SL/ST positions, ALJs, BCA members, the Foreign Service, and the Senior Foreign Service. The maximum locality rate of pay for these employees is the rate for level III of the Executive Schedule ($130,200 in 2000).

The locality pay areas for 2000 are unchanged from 1999. There are 32 locality pay areas (including the "Rest of U.S." area).

With this memorandum, we are providing a list of the 2000 locality pay percentages for the 32 locality pay areas, as well as the net percentage increase in each area (reflecting the combined effect of the 3.8 percent across-the-board increase and the applicable increase in the locality pay percentage rate). (See Attachment 2.) Also provided is a chart showing an example of how the 2000 locality rate and net increase is computed for an employee in the Rest of U.S. locality pay area. (See Attachment 3.)

Employees Receiving Special Rates

We have not yet completed the annual review of special rates. However, based on agency submissions received to date, we expect that virtually all special rate schedules will be adjusted by 3.8 percent. We will issue additional guidance to agencies as soon as the annual review has been completed. [The special rates review was completed on December 21, 1999. See memorandum to agency personnel directors, reporting on the results of this review.]

IGA Continued Rates

Certain employees in the former interim geographic adjustment (IGA) areas are entitled to a "continued rate" under 5 CFR part 531, subpart G. These continued rates were established in January 1994, when our regulations were revised to discontinue the practice of paying IGAs on top of nationwide or worldwide special rates. At the time of the January 2000 general pay increase, an IGA continued rate will be increased by the dollar amount of the increase in the employee's underlying GS rate. (See 5 CFR 531.703.) Since a continued rate is a form of saved pay, it is not affected by other pay actions, such as within-grade increases or promotions.

Law Enforcement Officers

We have issued separate locality or geographic salary tables for law enforcement officers (LEOs) in each locality pay area. These tables incorporate the statutory worldwide law enforcement special rates for grades GS-3 through GS-10, which are used as the base in computing any locality or other geographic payment. While LEOs are entitled to the same locality percentage rates that apply to other GS employees, higher geographic adjustments of 16 percent continue to apply to LEOs in four metropolitan areas: New York, Los Angeles, San Francisco, and Boston.

LEOs covered by the SES or SL/ST pay systems generally are entitled to the locality rates of pay shown in salary tables 2000-ES (LOC) or 2000-SL/ST (LOC), respectively. However, since LEOs covered by these pay systems in some metropolitan areas also are entitled to special pay adjustments for LEOs, these rates of pay are provided in salary tables 2000-ES (LEO) and 2000-SL/ST (LEO).

Certain law enforcement officers are entitled to a "continued rate" under 5 CFR 531.307 (established in January 1994 when our regulations were revised to discontinue the practice of paying LEO geographic adjustments on top of nationwide or worldwide special rates). As with IGA continued rates, at the time of the January 2000 across-the-board pay increase, an LEO continued rate will be increased by the dollar amount of the increase in the officer's underlying GS rate. (See 5 CFR 531.307(b).)

Order for Processing Pay Actions

The general pay adjustments that take effect on the first day of the first pay period beginning in January 2000 must be processed before any individual pay action (e.g., a within-grade increase or promotion) that takes effect on the same day. General pay adjustments include across-the-board increases under 5 U.S.C. 5303, increases in locality payments or other geographic adjustments, special rate increases, increases in retained rates, and increases in continued rates under 5 CFR 531.703 or 531.307. If there are multiple individual pay actions on the effective date of the January 2000 pay adjustment, those actions must be processed in the order that satisfies the simultaneous action rule in 5 CFR 531.203(f).

Pay Administration

To assist agencies in administering pay as a result of the 2000 pay adjustments for General Schedule employees, we are providing examples of pay computations in a variety of situations. (See Attachment 4.)

Salary Tables for 2000

The Government Printing Office will publish the "Salary Tables for 2000" book in early 2000. The salary table book will provide the 2000 salary tables, locality pay tables (including hourly rate tables), and detailed information on administering locality rates of pay, calculating rates of pay, maximum limitations on pay, and deductions for benefits.

IRS Tax Withholding Tables

The Internal Revenue Service (IRS) Publication 15, Circular E, Employers Tax Guide (revised January 2000), will show the 2000 wage bracket income tax withholding tables for both single and married persons who are paid on a biweekly basis. Publication 15 will be mailed by IRS to employers and also should be available at IRS offices in December 1999. (Call 1-800-829-3676 to order copies.) IRS publications may be downloaded from the IRS Internet website at http://www.irs.ustreas.gov/prod/forms_pubs/ index.html.

Internet Posting of Salary Tables and Locality Pay Area Definitions

We have posted various salary tables and a listing of locality pay area definitions on our Internet website. The posted salary tables include the General Schedule, the locality rates of pay for each locality pay area, Special Salary Rate Table No. 491 (for law enforcement officers), the law enforcement officer locality rates of pay for each locality pay area, and schedules for Executive Schedule, SES, ALJ, BCA, and SL/ST positions. The Internet address is http://www.opm.gov/oca/payrates/index.htm.

Questions

For further information, please contact our Pay and Leave Administration Division by calling (202) 606-2858, sending a FAX to (202) 606-0824, or sending an email message to payleave@opm.gov.

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Last Modified: 3:38:14 PM on Wednesday, August 20, 2003