[Federal Register Volume 60, Number 6 (Tuesday, January 10, 1995)]
[Proposed Rules]
[Pages 2546-2549]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 95-562]



 ========================================================================
 Proposed Rules
                                                 Federal Register
 ________________________________________________________________________
 
 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
 
 ========================================================================
 

  Federal Register / Vol. 60, No. 6 / Tuesday, January 10, 1995 / 
Proposed Rules  
[[Page 2546]]

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 300

RIN 3206-AG06


Time-In-Grade Rule Eliminated

AGENCY: Office of Personnel Management.

ACTION: Extension of public comment period on proposed elimination of 
time-in-grade rule.

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SUMMARY: On June 15, 1994, the Office of Personnel Management (OPM) 
proposed regulations to abolish the time-in-grade restriction on 
promotion of Federal employees to positions in the General Schedule. 
The National Performance Review and National Partnership Council had 
recommended the elimination of the 1-year Federal service requirement 
for promotions because it prevents employees from applying for jobs for 
which the qualify.
    To ensure that the public has ample opportunity to fully review and 
comment on the proposed rulemaking, this notice extends the public 
comment period for an additional 60 days.

DATES: Comments must be submitted on or before March 13, 1995.

ADDRESSES: Send or deliver written comments to Leonard R. Klein, 
Associate Director for Career Entry, Office of Personnel Management, 
Room 6F08, 1900 E Street, NW., Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT: Lee Shelkey Edwards on 202-606-0830, 
TDD 202-606-0023, or FAX 202-606-2329.

SUPPLEMENTARY INFORMATION:

A. Background

    Since the early 1950's, Federal employees in General Schedule 
positions at GS-5 and above have had to serve at least 1 year in grade 
before being promoted. This restriction originated in statute with the 
now expired ``Whitten Amendment,'' a series of controls on expansion of 
the Federal work force during the Korean conflict. The time-in-grade 
restriction currently is in 5 CFR part 300, subpart F. Prior to the 
Whitten Amendment, no such regulatory restriction existed.
    The National Performance Review recommended abolishing the time-in-
grade restriction because it prevents employees from being considered 
for jobs for which they qualify. On June 15, 1994, OPM proposed 
regulations (59 FR 30717) to abolish the time-in-grade restriction. We 
received 241 written comments; 30 agreed with the proposal (22 
individuals and 8 agencies) and 211 disagreed with it (197 individuals, 
5 employee unions, 2 agencies, and 7 other organizations).
    Comments from individuals include 189 form letters expressing 
serious concern that the proposal would have an adverse impact on 
minority and disabled employees. Others also commented that the 
elimination of time in grade could lead to favoritism and inequity in 
promotions, and promoted employees would not be qualified. A majority 
of commenters who opposed the proposal requested an extension of the 
comment period.
    As requested, OPM is extending the comment period to allow 
additional time to examine the proposal. We are also using this notice 
to provide additional information on the background of the time-in-
grade restriction and the impact of its elimination.

B. History of Restriction

    In the early 1950's as the conflict in Korea escalated, Congress 
determined it should take steps to prevent a permanent buildup of the 
civil service with expanded grade levels as had happened during World 
War II and, during 1951-52, it adopted the so-called ``Whitten 
Amendment,'' a series of personnel controls. These statutory controls 
included a requirement to make all promotions and appointments on a 
temporary basis to simplify readjustment downward at the end of the 
conflict, an annual survey of positions to assure they were properly 
graded, and time-in-grade restrictions to prevent excessively rapid 
promotions.
    Thus, the basis for the original time-in-grade restriction was not 
to prevent favoritism, but to prevent the permanent upgrading of the 
work force and avoid the disruption and readjustments required after 
World War II. The former Civil Service Commission was responsible for 
administering the restriction for competitive service positions and 
agency heads for excepted service positions.
    Before allowing the Whitten Amendment to expire, Congress sought a 
review by the Civil Service Commission to determine whether any of its 
provisions, including time-in-grade, should be retained. The Commission 
reported that the time-in-grade restriction on competitive service 
employees had been placed in regulation and would continue even if the 
Whitten Amendment expired. Subsequently, Congress permitted the Whitten 
Amendment to expire effective September 14, 1978. Since then, 
competitive service employees, but not excepted employees, have 
continued to be subject to the Governmentwide time-in-grade 
restriction, although individual agencies could at their discretion 
require it for excepted employees.
    Over the 16 years since its expiration, much has happened in 
Federal personnel administration. The civil service has been subject to 
numerous reviews, and several reports, most recently from the National 
Performance Review, have recommended deregulation and simplification of 
the hiring system. The time-in-grade rule is often seen as a symbol of 
bureaucratic red tape that binds managers hands and prevents the 
efficient use of qualified workers.

C. NPR Proposal

    In its September 1993 report From Red Tape to Results: Creating a 
Government That Works Better & Costs Less, the National Performance 
Review (NPR) recommended abolishing the time in-grade requirement as an 
arbitrary limit on competition. The requirement excludes from 
consideration those candidates who meet OPM qualification standards and 
have the proven ability to perform the duties of higher grade 
positions, but who have not served at least one year in lower graded 
Government positions. See pages 11 and 15 of Reinventing Human 
Resources Management, Accompanying Report of the National Performance 
Review.
    The National Partnership Council, established by Executive Order 
12871 of October 1, 1993, was charged with developing legislative 
proposals for the President to implement the NPR recommendations. The 
Council's report [[Page 2547]] also recommended abolishing the time-in-
grade restriction. In A Report to the President on Implementing 
Recommendations of the National Performance Review by the National 
Partnership Council, January 1994, the Council states on page 30:
    ``The NPC recommends the following * * * regulatory changes be made 
to allow employees to compete for job opportunities based on their 
qualifications and to enable decision makers to utilize employees more 
fully where needed--
     Abolish the time-in-grade regulatory requirement. For 
bargaining unit employees, the current requirement should remain in 
effect until the parties agree to modify it either through consensus or 
collective bargaining.''
    Thus, OPM's proposal is consistent with recommendations of both the 
NPR and National Partnership Council.

D. Impact of Proposal

Shrinking Federal Work Force

    When Congress passed the Whitten Amendment in the 1950's, the civil 
service was expanding to respond to the needs of the growing conflict 
in Korea. Time in grade was a brake on that expansion.
    The situation today is just the opposite. The Federal Workforce 
Restructuring Act of 1994, Pub. L. 103-226 of March 30, 1994, mandates 
reductions in Federal employment levels. Employment in executive 
agencies is to be reduced in each fiscal year from FY 94 through FY 99 
by a total of 272,900 positions. Also, the level of agency funding is 
being reduced because of deficit reduction legislation.
    The results is that managers must do more with fewer employees and 
less money. Managers cannot inflate grade levels because their funds 
and position authorizations will be tight. And, since agencies are 
being asked to do more with less, the quality of the work force has 
become even more important. It makes more sense for managers to be able 
to select from among the best-qualified employees available, regardless 
of their existing grade levels.
    Another effect of the shrinking work force is fewer opportunities 
for employee advancement. Agencies traditionally encourage employees to 
improve their capabilities. Employees who have acquired new skills and 
knowledge--many on their own time and with their own resources--will 
find far fewer vacancies available. The time-in-grade restriction is 
just one more obstacle to prevent them from competing to use the new 
skills they have worked hard to acquire, even though they meet OPM 
qualification standards.

Coverage

    Not all Federal employees are subject to the restriction. The 
Whitten Amendment applied to both competitive and excepted employees in 
GS positions. However, when the law expired in 1978, excepted employees 
were released from its coverage because OPM's time-in-grade regulations 
apply only to the competitive service. Other competitive service 
employees under other pay plans, such as the wage grade system, also 
are free of the restriction. Yet the lack of a time-in-grade 
restriction has had no discernible adverse effect on these excepted and 
wage grade positions. OPM's proposal would put competitive service 
employees on an equal footing by allowing them to compete for 
advancement based on their qualifications just as these other employees 
do.

Qualifications

    Many of the commenters who disagreed with the proposal believed 
that its abolishment would result in the promotion of employees who are 
not qualified for their jobs. This is not true. When the time-in-grade 
restriction was implemented in the 1950's, no effective means existed 
to prevent employees from advancing rapidly through the grades. But 
there is now in place a comprehensive qualification standards system 
covering all General Schedule positions in the competitive service.
    To qualify for most positions, an individual must have 1 year of 
specialized experience equivalent in difficulty to the next lower grade 
level, or equivalent education. Even without the time-in-grade 
restriction, individuals must meet this specialized experience or 
education requirement. Thus, this proposal would not result in the 
hiring of unqualified persons. Nor would this proposal allow persons to 
be placed in a higher grade position merely because of their 
``potential'' and without the necessary qualifying background. In fact, 
the only employees who could be promoted in less than 1 year are those 
who have higher level experience from another job or qualifying 
education.
    Abolishment of time in grade simply means that employees may be 
considered for any grade for which they meet the qualification 
requirements, either through education or experience acquired in 
Federal or any other work settings. Employees may compete in civil 
service examinations without regard to time in grade, and this proposal 
would enable them also to compete under internal merit promotion 
procedures based on qualifications.
    The time-in-grade restriction prevents that consideration, as with 
individuals who take lower graded jobs when nothing else is available 
and then find they are not allowed to apply for higher graded jobs for 
which they are well qualified. Letters from individuals supporting the 
proposed elimination provide other representative examples of how time 
in grade inhibits employee advancement:

--An employee pursued Bachelors and Masters degrees while balancing 
time as a student, mother, and Federal clerical employee in 
positions up to GS-5, yet time in grade prevents her from competing 
for the GS-9 professional positions for which she now qualifies.
--An employee whose agency has had a longstanding hiring freeze has 
been detailed to a higher grade position for more than 1 year. 
Although the employee is now qualified for a position two grades 
higher, he meets time in grade only for positions one grade higher.
--A minority employee entered Government employment as a GS-9. 
Despite two Masters degrees, a year and a half of law school, 10 
years experience in executive positions at a private corporation, 
service as adjunct instructor at a major university, and other 
substantive experience, he was restricted by time in grade from 
applying for managerial positions for which he qualified.
--A co-op student accepted a GS-4 clerical job when her agency 
terminated its trainee program. Most jobs in her field start at GS-
7, for which she qualifies, but she is eligible only for GS-5 
because of time in grade and will have to pursue a different line of 
work.
--A retired military member with a degree and over 20 years of 
experience took a Federal wage grade position. A debilitating 
accident required him to accept a GS-4 position, and now time in 
grade prevents him from applying for positions consistent with his 
experience.

Impact on Minorities

    Individual commenters and organizations representing minority 
employees were concerned that eliminating time in grade would lead to 
abuse and favoritism, with a negative impact on affirmative action and 
equal employment opportunity. OPM does not believe that retention of 
time in grade contributes to equality in the work place. Although 
abolishing the restriction will not eliminate the ``glass ceiling,'' it 
would be one more step toward eliminating artificial barriers to 
employees advancement for minorities and nonminorities alike.

Promotions

    Even without time in grade, agencies must continue to assure that 
employees [[Page 2548]] meet Governmentwide qualification standards to 
be eligible for promotion, both competitive actions under the merit 
promotion program and noncompetitive actions such as career ladder 
promotions. Agencies also must continue to evaluate the relative 
qualifications of candidates to determine the best-qualified applicants 
under a competitive promotion action. Therefore, it is not necessary 
for an agency to have any additional processes or systems in place 
before implementing the abolishment of time in grade.
    Many commenters focused on the impact of the proposal on career 
ladder promotions. Several thought employees in career ladders would 
expect rapid advancement without time in grade and that managers could 
be pressured into making rapid promotions. Again, we must stress that 
career ladder promotions require an individual to have 1 year of 
specialized experience equivalent in difficulty to the next lower grade 
level or possess equivalent education.
    Furthermore, agencies have the discretion to specify requirements 
employees must meet for career ladder promotions, and many have done 
so. Such requirements include, for example, the level of performance to 
be met, the range of skills to be acquired, a finding that higher level 
duties exist, and the availability of funds. Elimination of time in 
grade will enable agencies to dispel the idea that promotion 
automatically follows a period of time in grade and instead concentrate 
on qualifications and the level of performance that is need for the 
next higher level.
    One employee union suggested that OPM consider whether to limit the 
number of grades an employee could be promoted in a year. The current 
regulation has such limits only on promotions up to GS-5 because 
employees in grades GS-1 through GS-4 are not subject to the year in 
grade requirement. OPM believes grade limits are not needed because 
they too are arbitrary and disregard employee qualifications.
    One employee union felt it would normally disrupt the work place to 
a great degree if a lower graded employee were promoted over higher 
graded employees. The union believes this should occur only when there 
is a specific, identifiable, business-related reason which the agency 
documents in writing. OPM's view is that managers must be prepared to 
deal with the impact of selection decisions, such as when selecting an 
individual from outside an immediate unit instead of an eligible 
employee within the unit. The manager decide which qualified employee 
is best able to carry out the duties of the position and must weigh 
various effects of different options. Abolishment of time in grade 
would not alter this responsibility.
    Several commenters suggested managers hire workers at the grade 
needed instead of, for example, hiring at the GS-5 level and later 
promoting the employee to a GS-9. However, there may be instances where 
a manager hires an employee at a lower level to save money or because 
the manager feels the individual is not ready for the higher level. If 
the funding level changes or the employee demonstrates good work, the 
manager might want to promote the employee is less than 1 year. In 
neither of these cases is there a merit system violation, and our 
proposal would allow these employees to advance.

 Violations

    Some individuals, for personal reasons, must accept jobs lower than 
their highest skill level and later will seek higher grade jobs. 
However, it would be improper for an agency to hire someone at a lower 
grade to avoid proper appointing procedures and then promote the 
individual to the desired grade. For example, it would be improper to 
appoint an individual to a clerical job because he or she is not 
``within reach'' for appointment to a professional job, and then 
promptly promote the person to the professional job. To prevent this, 5 
CFR 330.501 prohibits the promotion of an employee within 90 days of a 
new competitive appointment. OPM continues to enforce violations of 
that provision and, in the absence of a time-in-grade rule, would 
closely monitor agency actions for potential violations.
    Other protections against potential abuse are the statutory merit 
principles and prohibited personnel practices (5 U.S.C. 2301 and 2302) 
in place since January 1979. For example, it is a prohibited personnel 
practice for an agency official to grant any preference or advantage 
not authorized by law, rule, or regulation to any employee or applicant 
for the purpose of improving or injuring the prospects of any 
particular person for employment (5 U.S.C. 2302(b)(6)). These statutory 
provisions did not exist when the Whitten Amendment expired in 1978. 
Alleged violations may be pursued through the independent Office of 
Special Counsel, which is responsible for investigating allegations of 
prohibited personnel practices and initiating corrective or 
disciplinary action where warranted.

Training Agreements

    Agencies have long had the authority to establish training 
agreements under which employees acquire qualifications at a faster 
than normal rate. This proposal will have no impact on agencies' 
continued use of training agreements. However, with abolishment of time 
in grade, agencies no longer will need to obtain OPM approval of 
training agreements that contain waivers of time in grade.
    Training agreements are traditionally used for critical shortage 
occupations at the entry level. These programs provide a valuable 
recruitment incentive in filling positions where qualified applicants 
are in extremely short supply.

E. Waivers

    Several commenters recommended the time-in-grade restriction be 
retained with authority to waive it in inequitable or hardship 
situations or to promote an outstanding employee. Agencies currently 
have waiver authority in inequitable or hardship situations. The 
problem with this approach is that an employee is dependent on agency 
management to seek a waiver when management needs it. Our proposed 
elimination of the restriction would free employees to seek other 
opportunities, in any agency, without being dependent on management's 
waiver action. Also, because of the restriction, managers often are not 
aware that lower graded employees may have higher level qualifications 
and thus seek job candidates from outside the agency.

F. Bargaining Unit Employees

    One employee union suggested that OPM should not allow agencies to 
eliminate time in grade for nonbargaining unit employees while 
continuing to apply it to those in bargaining units. OPM's proposal is 
consistent with the National Partnership Council recommendations to 
abolish the regulatory time-in-grade rule. Inasmuch as time in grade 
has been a condition of employment for bargaining unit employees, the 
Council recommended that it should remain in effect until the 
bargaining unit parties (agency management and union) agree to modify 
it either through consensus or collective bargaining. In other words, 
OPM's elimination of the regulation would have no effect on bargaining 
unit positions unless the parties agreed to modify or eliminate time in 
grade.
    OPM has no authority to require agencies to seek agreement with 
unions, through consensus or collective bargaining, over time-in-grade 
[[Page 2549]] provisions or to prohibit agencies from implementing a 
regulatory revision affecting nonbargaining unit positions.

G. Public Notice

    Many individual commenters asked that we ensure proper 
dissemination of National Performance Review initiatives to all levels 
of the work force to allow greater input and commentary. Some 
commenters suggested that OPM's 60-day comment period on the initial 
proposal appeared to be designed to restrict the number of comments and 
commenters.
    OPM's 60-day comment period is the standard open period for 
receiving comments on proposed regulatory changes. As is our usual 
practice required by law, OPM distributed the time-in-grade proposal to 
agencies with instructions for public posting. OPM also made the 
proposal available through its primary electronic bulletin board, 
Mainstreet, at 202-606-4800. OPM issued a press release on the 
proposal, and it was widely reported in the press. We are taking the 
same steps with this notice. Furthermore, the recommendations of the 
NPR and the National Partnership Council were widely reported in the 
press and in newsletters that reach employees.

    Authority: 5 U.S.C. secs. 552, 3301, 3302; E.O. 10577, 3 CFR, 
1954-1958 Comp., page 218, unless otherwise noted.

    Secs. 300.101 through 300.104 also issued under 5 U.S.C. secs. 
7201, 7204, 7701; E.O. 11478, 3 CFR, 1966-1970 Comp., page 803.
    Secs. 300.401 through 300.408 also issued under 5 U.S.C. secs. 
1302(c), 2301, and 2302.
    Secs. 300.501 through 300.507 also issued under 5 U.S.C. 
1103(a)(5).)

Office of Personnel Management.
James B. King,
Director.
[FR Doc. 95-562 Filed 1-9-95; 8:45 am]
BILLING CODE 6325-01-M