[Federal Register Volume 62, Number 100 (Friday, May 23, 1997)]
[Rules and Regulations]
[Pages 28305-28308]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-13492]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 100 / Friday, May 23, 1997 / Rules 
and Regulations  

[[Page 28305]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 532, 550, 551, and 610

RIN 3206-AH86


Holidays and Premium Pay

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

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SUMMARY: In compliance with recent changes in law, the Office of 
Personnel Management (OPM) is issuing interim regulations on 
compensatory time off for prevailing rate (wage) employees, ``in lieu 
of'' holidays for employees on compressed work schedules, and premium 
pay for nonappropriated fund (NAF) wage employees on flexible or 
compressed work schedules.

DATES: The amendments made by section 1041 of The Department of Defense 
Authorization Act of 1996 and the interim regulation in revised 
Sec. 532.513 of title 5, Code of Federal Regulations, are effective 
retroactively to February 10, 1996. The amendments made by sections 
1610 and 1613 of The National Defense Authorization Act for Fiscal Year 
1997 (Pub. L. 104-201) and the interim regulations in new Sec. 532.504 
and revised Secs. 550.114, 551.531, and 610.202 of title 5, Code of 
Federal Regulations, are effective retroactively to September 23, 1996. 
Comments must be received on or before July 22, 1997.

ADDRESSES: Comments may be sent or delivered to Donald J. Winstead, 
Assistant Director for Compensation Policy, Human Resources Systems 
Service, Office of Personnel Management, Room 6H31, 1900 E Street NW., 
Washington, DC 20415. (FAX: (202) 606-0824 or Internet email: 
[email protected]).

FOR FURTHER INFORMATION CONTACT: James Weddel, (202) 606-2858, FAX: 
(202) 606-0824, or Internet email: [email protected].

SUPPLEMENTARY INFORMATION: The regulatory changes set forth below are 
necessary to conform with provisions of law as a result of enactment of 
The Department of Defense Authorization Act for Fiscal Year 1996, 
Public Law 104-106, February 10, 1996; and The National Defense 
Authorization Act for Fiscal Year 1997, Public Law 104-201, September 
23, 1996.

(1) Premium Pay for NAF Wage Employees Authorized to Work Under 
Flexible and Compressed Work Schedules

    Section 1041 of The National Defense Authorization Act For Fiscal 
Year 1996 (Pub. L. 104-106) amended the definition of ``employee'' at 5 
U.S.C. 6121 to extend the authority to establish flexible and 
compressed work schedules (subchapter II of chapter 61 of title 5, 
United States Code) to civilian employees of the Armed Services paid 
from nonappropriated funds. Consistent with this change in law, an OPM 
regulation stating that wage employees who are authorized to work 
flexible or compressed work schedules shall be paid premium pay in 
accordance with subchapter II of chapter 61 of title 5, United States 
Code, has been amended to delete superseded language stating that this 
paragraph does not apply to nonappropriated fund employees of the Armed 
Services, as defined in 5 U.S.C. 2105(c). See revised Sec. 532.513. The 
authority granted to agency heads by section 1041 became effective on 
February 10, 1996.

(2) Compensatory Time Off for Prevailing Rate (Wage) Employees

    The new interim regulations on compensatory time off reflect 
amendments made by section 1610 of The National Defense Authorization 
Act for Fiscal Year 1997 (Pub. L. 104-201, September 23, 1996). The 
regulations are intended to be parallel to OPM's current regulations on 
compensatory time off under title 5, United States Code, and the FLSA 
to the maximum extent possible. Section 1610 amended 5 U.S.C. 5543 to 
permit the head of any agency to approve a prevailing rate employee's 
request for compensatory time off instead of overtime pay under either 
5 U.S.C. 5544 or the FLSA for an equal amount of time spent in 
irregular or occasional overtime work.
    The new provision also permits the approval of requests from 
prevailing rate employees under compressed work schedules for 
compensatory time off instead of overtime pay in exchange for an equal 
amount of time spent in irregular or occasional overtime work. The law 
prohibits mandatory compensatory time off for all wage employees. The 
authority granted to agency heads by section 1610 became effective on 
September 23, 1996. This new authority is in addition to authority in 
section 6123(a)(1) of title 5, United States Code, which authorizes 
compensatory time off for prevailing rate employees who work under 
flexible work schedules. Although this previously existing authority 
has been included in the premium pay regulations at Sec. 550.114(b), it 
has not previously been included in OPM's regulations in part 532 for 
prevailing rate systems. Therefore, part 532 has been revised to 
reflect this previously existing legal authority as well as the newly 
enacted legal authority for approval of requests from wage employees 
who are not under flexible work schedules for compensatory time off in 
lieu of overtime pay for irregular or occasional overtime work.
    Part 532 has also been amended to reflect the legal prohibition 
against requiring that a prevailing rate employee be compensated for 
overtime work with an equivalent amount of compensatory time off. 
Finally, on the recommendation of the Federal Prevailing Rate Advisory 
Committee, part 532 has been amended to provide that prevailing rate 
employees may not be directly or indirectly intimidated, threatened, or 
coerced for the purpose of interfering with his or her rights to 
request or not to request compensatory time off. The regulation also 
states that the same prohibited actions may not be attempted. See new 
Sec. 532.504.
    The change in law authorizing approval of requests for compensatory 
time off is applicable to all prevailing rate employees, including 
those who are covered by the FLSA. We have revised the FLSA regulations 
to provide that an agency head (or designee) may approve a request from 
any nonexempt employee for compensatory time off in lieu of overtime 
pay for irregular or occasional overtime work. This is consistent with

[[Page 28306]]

the broad statutory language in 5 U.S.C. 5543, which provides that the 
head of an agency may grant a request for compensatory time off from an 
employee's scheduled tour of duty instead of payment under section 5542 
or 5544 of title 5, United States Code, or section 7 of the FLSA for an 
equal amount of time spent in irregular or occasional overtime work. 
This change will, for example, permit the applicable agency heads to 
approve requests for compensatory time off for nonexempt members of the 
United States Secret Service Uniformed Division or nonexempt members of 
the United States Park Police.
    The revised FLSA regulations also provide that no employee covered 
by the FLSA may be intimidated, threatened, or coerced to request or 
not to request compensatory time off. The FLSA regulations on 
compensatory time off already provide that compensatory time off may 
not be required for nonexempt employees. This is consistent with the 
new provisions in law on compensatory time off for prevailing rate 
employees. It is also consistent with 5 U.S.C. 6132(a)(1), which 
provides that an employee may not threaten, coerce, or intimidate any 
other employee under a flexible work schedule (or threaten to do so) 
for the purpose of interfering with such an employee's rights to 
request or not to request compensatory time off. See revised 
Sec. 551.531.
    Since regulatory requirements on compensatory time off for 
prevailing rate employees have been added to part 532 and part 551, the 
current language authorizing compensatory time off for prevailing rate 
employees under flexible work schedules has been deleted from part 550. 
Limits on the accumulation and timely use of compensatory time off are 
set by agency policy or negotiation with appropriate employee 
representatives, as permitted by new Sec. 532.504(d).

(3) Designation of ``In lieu of'' Holidays for Employees on Compressed 
Work Schedules

    The interim regulations on ``in lieu of'' holidays reflect 
amendments made by section 1613 of The National Defense Authorization 
Act for Fiscal Year 1997 (Pub. L. 104-201, September 23, 1996). Section 
1613 adds a new subsection (d) to 5 U.S.C. 6103 that allows an agency 
head to designate a different ``in lieu of'' holiday than would be 
required under 5 U.S.C. 6103(b) in certain circumstances--namely, for 
full-time employees on compressed work schedules when the head of the 
agency determines that a different ``in lieu of'' holiday is necessary 
to prevent an ``adverse agency impact.'' The phrase ``adverse agency 
impact'' is defined in 5 U.S.C. 6131(b) as ``(1) a reduction of the 
productivity of the agency; (2) a diminished level of services 
furnished to the public by the agency; or (3) an increase in the cost 
of agency operations (other than a reasonable administrative cost 
relating to the process of establishing a flexible or compressed work 
schedule).''
    This new flexibility is applicable to all agencies covered by 
subchapters I and II of chapter 61 of title 5, United States Code, and 
is granted to an agency head notwithstanding any other provision of law 
or the terms of any collective bargaining agreement. However, a new 
paragraph (c) has been added to 5 CFR 610.202 to provide that the ``in 
lieu of'' holiday selected by the agency for an employee under a 
compressed work schedule must be a workday in the same biweekly pay 
period as the date of the actual holiday established by 5 U.S.C. 
6103(a) or must be a workday in the pay period immediately preceding or 
following that pay period. This provision is intended to (1) preclude a 
long delay in providing an ``in lieu of'' holiday to an employee and 
(2) prevent accumulation of holiday hours as if they were paid hours of 
leave. The authority granted to agency heads by section 1613 became 
effective on September 23, 1996.

(4) Appropriations Limitations on the Payment of Sunday Premium Pay and 
Night Pay Differential in Certain Agencies

    Section 630 of The Treasury, Postal Service, and General Government 
Appropriations Act, 1997, as contained in section 101(f) of Public Law 
104-208, The Omnibus Consolidated Appropriations Act, 1997, prohibits 
the use of funds appropriated under the Act for the payment of Sunday 
premium pay and night pay differential pay to employees who do not 
actually perform work during the time corresponding to such Sunday 
premium or night pay differential. This prohibition applies only to 
agencies whose appropriations are provided by The Treasury, Postal 
Service, and General Government Appropriations Act, 1997. Affected 
agencies should be aware that this change in law restricts their 
implementation of 5 CFR 532.505, 532.509, 550.122, and 550.171.
    Within the covered agencies, this prohibition applies to any 
employee who is paid from funds appropriated by the Act, including but 
not limited to General Schedule and prevailing rate employees. This 
provision has the effect of prohibiting the payment of Sunday premium 
pay or night pay differential to covered employees during any period 
when no work is performed, apparently including holidays and periods of 
paid leave, excused absence with pay, compensatory time off, credit 
hours when used (taken), or time off as an incentive or performance 
award. Paid leave includes all types of paid leave, including paid 
leave for jury or witness service under 5 U.S.C. 6322 and military 
leave under 5 U.S.C. 6323.
    This prohibition also appears to preclude a covered agency from 
paying Sunday premium pay or night pay differential during a period of 
continuation of pay under the authority of the Federal Employees' 
Compensation Act (FECA) when the employee did not actually work on 
Sunday or at night. Similarly, this prohibition appears to preclude a 
covered agency from reimbursing the Department of Labor for FECA 
benefits paid to its employees to the extent that the employees have 
received FECA benefits that are based on Sunday premium pay or night 
pay differential that the employees would have earned had they worked, 
but did not earn because they did not actually work on Sunday or at 
night. The Department of Labor may be able to waive overpayments that 
occurred. OPM believes that is an issue to be worked out between 
affected agencies and the Department of Labor. Section 630 became 
effective on September 30, 1996.
    A similar ban on the payment of Sunday premium pay was also in 
effect for employees of the Federal Aviation Administration (FAA) under 
The Transportation and Related Agencies Appropriations Acts for FY 
1995, 1996, and 1997. This was included in the 1997 Transportation and 
Related Agencies Appropriation Act even though Congress has authorized 
FAA to implement its own personnel system. Since the application of 
these appropriations restrictions is limited and the restrictions may 
expire, we have not amended OPM regulations on payment of Sunday 
premium pay and night pay differential. Nevertheless, affected agencies 
must comply with these appropriations restrictions.

Waiver of Notice of Proposed Rule Making and Delay in Effective 
Date

    The authority for agencies to authorize flexible and compressed 
work schedules for NAF employees of the Armed Services, provided by 
section 1041 of The Department of Defense Authorization Act for Fiscal 
Year 1996 (Public Law 104-106), became effective on February 10, 1996. 
Authority for

[[Page 28307]]

employer-employee agreements providing that commuting by use of a 
Government vehicle shall not create hours of work for the purpose of 
providing overtime pay under the FLSA is provided by The Employee 
Commuting Flexibility Act of 1996, as contained in sections 2101 
through 2103 of The Small Business Job Protection Act of 1996 (Pub. L. 
104-188), and became effective on August 20, 1996.
    The authority granted to agency heads under section 1610 of The 
National Defense Authorization Act for Fiscal Year 1997 (Public Law 
104-201) to approve requests from prevailing rate employees for 
compensatory time off in lieu of overtime pay for irregular or 
occasional overtime work became effective on September 23, 1996. 
Section 1613 of the same Act, which allows an agency head to designate 
a different ``in lieu of'' holiday than would be required under 5 
U.S.C. 6103(b) for full-time employees on compressed work schedules, 
also became effective on September 23, 1996.
    In order to implement these changes on the effective dates 
established for them by law, I find good cause to waive the general 
notice of proposed rulemaking pursuant to 5 U.S.C. 553(b)(3)(B). Also, 
I find that good cause exists for making this rule effective 
retroactively. The retroactive effective dates are necessary in order 
to implement the changes in law on their statutory effective dates.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
will apply only to Federal agencies and employees.

List of Subjects in 5 CFR Parts 532, 550, 551, and 610

    Administrative practice and procedure, Claims, Freedom of 
information, Government employees, Holidays, Reporting and 
recordkeeping requirements, Wages.

Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM is amending parts 532, 550, 551, and 610 of title 
5 of the Code of Federal Regulations as follows:

PART 532--PREVAILING RATE SYSTEMS

    1. The authority citation for part 532 continues to read as 
follows:

    Authority: 5 U.S.C. 5343, 5346; Sec. 532.707 also issued under 5 
U.S.C. 552.

Subpart E--Premium Pay and Differentials

    2. Section 532.504 is added to read as follows:


Sec. 532.504  Compensatory time off.

    (a) At the request of an employee, the head of an agency may grant 
compensatory time off from an employee's tour of duty instead of 
payment under Sec. 532.503 or the Fair Labor Standards Act of 1938, as 
amended, for an equal amount of irregular or occasional overtime work.
    (b) At the request of an employee, the head of an agency may grant 
compensatory time off from an employee's basic work requirement under a 
flexible work schedule under 5 U.S.C. 6122 instead of payment under 
Sec. 532.503 or the Fair Labor Standards Act of 1938, as amended, for 
an equal amount of overtime work, whether or not irregular or 
occasional in nature.
    (c) An agency may not require that an employee be compensated for 
overtime work with an equal amount of compensatory time off from the 
employee's tour of duty. An employee may not directly or indirectly 
intimidate, threaten, or coerce, or attempt to intimidate, threaten, or 
coerce any other employee for the purpose of interfering with such 
employee's rights to request or not to request compensatory time off in 
lieu of payment for overtime hours.
    (d) The head of a department may fix a time limit for an employee 
to request or take compensatory time off and may provide that an 
employee who fails to take compensatory time earned under paragraph (a) 
or (b) of this section before the time limit fixed shall lose the right 
to compensatory time off and to overtime pay unless the failure is due 
to an exigency of the service beyond the employee's control.
    3. Section 532.513 is revised to read as follows:


Sec. 532.513  Flexible and compressed work schedules.

    Federal Wage System employees who are authorized to work flexible 
and compressed work schedules under sections 6122 and 6127 of title 5, 
United States Code, shall be paid premium pay in accordance with 
subchapter II of chapter 61 of title 5, United States Code. Subpart D 
of part 610 of this chapter supplements subchapter II and must be read 
together with it.

PART 550--PAY ADMINISTRATION (GENERAL)

Subpart A--Premium Pay

    4. The authority citation for subpart A of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5304 note, 5305 note, 5541(2)(iv), 5548, and 
6101(c); E.O. 12748, 3 CFR, 1991 Comp., p. 316.

    5. In Sec. 550.114, paragraphs (a) and (b) are revised to read as 
follows:


Sec. 550.114  Compensatory time off.

    (a) At the request of an employee, the head of an agency (or 
designee) may grant compensatory time off from an employee's tour of 
duty instead of payment under Sec. 550.113 for an equal amount of 
irregular or occasional overtime work.
    (b) At the request of an employee, as defined in 5 U.S.C. 2105, the 
head of an agency (or designee) may grant compensatory time off from an 
employee's basic work requirement under a flexible work schedule under 
5 U.S.C. 6122 instead of payment under Sec. 550.113 for an equal amount 
of overtime work, whether or not irregular or occasional in nature.
* * * * *

PART 551--PAY ADMINISTRATION UNDER THE FAIR LABOR STANDARDS ACT

    6. The authority citation for part 551 continues to read as 
follows:

    Authority: 5 U.S.C. 5542(c); Sec. 4(f) of the Fair Labor 
Standards Act of 1938, as amended by Pub. L. 93-259, 88 Stat. 55 (29 
U.S.C. 204f).

Subpart E--Overtime Pay Provisions

    7. In Sec. 551.531, paragraphs (a) and (c) are revised to read as 
follows:


Sec. 551.531  Compensatory time off.

    (a) At the request of an employee who is not exempt under subpart B 
of this part, the head of an agency (or designee) may grant 
compensatory time off from an employee's tour of duty instead of 
payment under Sec. 551.501 for an equal amount of irregular or 
occasional overtime work.
* * * * *
    (c) An agency may not require that an employee be compensated for 
overtime work under this subpart with an equivalent amount of 
compensatory time off from the employee's tour of duty. An employee may 
not directly or indirectly intimidate, threaten, or coerce, or attempt 
to intimidate, threaten, or coerce any other employee for the purpose 
of interfering with such employee's rights to request or not to

[[Page 28308]]

request compensatory time off in lieu of payment for overtime hours.
* * * * *

PART 610--HOURS OF DUTY

Subpart B--Holidays

    8. The authority citation for subpart B of part 610 continues to 
read as follows:

    Authority: 5 U.S.C. 6101; sec. 1(1) of E.O. 11228, 3 CFR, 1964-
1965 Comp., p. 317.

    9. In Sec. 610.202, paragraph (b) is revised, and paragraph (c) is 
added, to read as follows:


Sec. 610.202  Determining the holiday.

* * * * *
    (b) When a holiday falls on a nonworkday outside an employee's 
basic workweek, the day to be treated as his or her holiday is 
determined in accordance with sections 6103 (b) and (d) of title 5, 
United States Code, and Executive Order 11582.
    (c) When an agency determines the holiday in accordance with 
section 6103(d) of title 5, United States Code, for an employee under a 
compressed work schedule, the agency shall select a workday for the 
holiday that is in the same biweekly pay period as the date of the 
actual holiday designated under 5 U.S.C. 6103(a) or in the biweekly pay 
period immediately preceding or following that pay period.

[FR Doc. 97-13492 Filed 5-22-97; 8:45 am]
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