[Federal Register Volume 64, Number 237 (Friday, December 10, 1999)]
[Rules and Regulations]
[Pages 69165-69182]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-31867]



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  Federal Register / Vol. 64, No. 237 / Friday, December 10, 1999 / 
Rules and Regulations  

[[Page 69165]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 410, 530, 531, 536, 550, 551, 575, 591, and 610

RIN 3206-AH11


Miscellaneous Changes in Compensation Regulations

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management is issuing final 
regulations to correct or clarify various regulatory provisions dealing 
with the compensation of Federal employees. Many of the changes were 
prompted by questions and comments from users of the regulations. The 
regulatory changes are intended to assist agencies in administering 
compensation programs and to provide clearer information to employees 
covered by those programs.

DATES: This rule is effective January 10, 2000.

FOR FURTHER INFORMATION CONTACT: Bryce Baker, (202) 606-2858, FAX: 
(202) 606-0824, or email to [email protected].

SUPPLEMENTARY INFORMATION: On November 24, 1998, the Office of 
Personnel Management (OPM) published proposed regulations dealing with 
a number of miscellaneous changes in OPM's pay administration 
regulations. (See 63 FR 64880.) These changes were proposed to correct 
various typographical or technical errors or omissions and to codify or 
clarify OPM policies. The supplementary information section of the 
proposed regulations changes included a table describing each 
regulatory change by section number.
    OPM received comments from five agencies, one labor union, and four 
individuals on the proposed regulations. Several agencies made general 
comments supporting the proposed regulations as providing helpful 
clarification. We provide below a description of each specific comment 
and our response. All references to regulatory sections are in title 5, 
Code of Federal Regulations, unless otherwise noted.

Review of Comments on Proposed Regulations

Aggregate Limitation on Pay

Section 530.202--Discretionary Payment

    A union questioned the proposed revision of the definition of 
discretionary payment in Sec. 530.202. It commented that the change is 
described as a clarification without a supporting citation.
    In the supplementary information section of the proposed 
regulations, we cited the supplementary information section of the 
original final regulations on the aggregate pay limitation'i.e., 58 FR 
50248, September 27, 1993--which included this statement: ``Retention 
allowances are the only payments made on a pay-period-by-pay-period 
basis that remain discretionary once they have been authorized.'' Thus, 
the proposed revision is consistent with the intent of the original 
aggregate pay limitation regulations.

Section 530.202--Estimated Aggregate Compensation

    A union opposed the proposal to revise the definition of estimated 
aggregate compensation in Sec. 530.202 so that it clearly includes 
nondiscretionary payments to which an employee is expected to be 
entitled. The union believes that an overestimate of expected 
compensation would prevent the employee from receiving a discretionary 
payment. It stated that the current regulation is preferable because it 
does not allow speculation. The union also stated that if the purpose 
is to prevent excess payments, Sec. 530.204 already provided an 
adequate mechanism for handling excess payments.
    The proposed change merely clarifies that the term estimated 
aggregate compensation includes estimated or projected nondiscretionary 
payments. (See the supplementary information accompanying the final 
aggregate pay limitation regulations at 58 FR 50247 (September 27, 
1993).) In the current regulations, the beginning part of the 
definition already states that a ``projection'' of what an employee 
``will receive during the year'' based on ``known factors'' must be 
made. Thus, estimates of projected nondiscretionary payments must take 
into account known future changes that will affect the amount payable 
to the employee. (Note use of the term ``projected'' in 
Sec. 530.203(c). Also, see examples given in the supplementary 
information accompanying the proposed rule at 63 FR 64880.) The purpose 
is to prevent excess payments, consistent with the intent of the law.
    Section 530.204 does not deal with preventing or handling excess 
payments, but rather addresses the payment of monies properly withheld 
from the employee because of the cap that become payable at the 
beginning of the next calendar year. A new paragraph (f) in 
Sec. 530.203 addresses the handling of erroneous excess payments.
    We note that, with the exception of retention allowances, the 
aggregate pay limitation does not control the amount of discretionary 
payments agencies may award; however, the cap may result in such 
payments being delayed until the beginning of the next calendar year. 
If a projection of compensation is found to be high, the agency may 
immediately pay any previously deferred amounts as allowed under 
current projections, and any unpaid amount would be payable at the 
beginning of the next year. In these final regulations, we are revising 
the definition of estimated aggregate compensation as proposed, except 
that we are substituting the word ``projected'' in place of 
``expected'' to emphasize the connection to the introductory part of 
the definition.

Section 530.203(f)

    An agency suggested that we clarify the tax implications of deeming 
erroneous excess payments to be paid on January 1 of the next calendar 
year. It noted that, if the payment is treated as taxable income in the 
year paid (the normal rule), then the taxable income and the aggregate 
compensation for the subsequent year will differ.
    OPM does not have authority to regulate tax matters. Our 
regulations deem erroneous excess payments to be paid on January 1 of 
the next calendar year only for the purpose of applying the aggregate 
pay limitation. Thus, it

[[Page 69166]]

may be possible that, in rare cases where the cap is exceeded, agencies 
will have to maintain different balances for taxable income and 
aggregate pay.

Basic Pay Administration

Section 531.203(d)(3)

    An agency noted that the proposed Sec. 531.203(d)(3) should 
reference Sec. 531.203(d)(2)(vii) instead of (d)(2)(vi). We agree and 
are making the correction in these final regulations.

Section 531.203(d)(3) and 531.204(a)(2)

    An agency requested that we add appropriate references to statutory 
special rates for law enforcement officers in Secs. 531.203(d)(3) and 
531.204(a)(2), consistent with the proposed change in 
Sec. 531.203(d)(2).
    We agree that law enforcement special rates should be excluded in 
applying the rule in Sec. 531.203(d)(3), since that rule has 
application only for cases involving other types of special rates that 
are not basic pay for all purposes. Also, in Sec. 531.204(a)(2) 
(dealing with pay setting upon promotion), a law enforcement special 
rate should be included within the term ``existing rate of basic pay.'' 
We have made appropriate changes in these final regulations.

Pay Retention

Section 536.102

    A union opposed the proposed clarification of the definition of 
demotion at an employee's request in Sec. 536.102. It stated that the 
proposed language referencing management actions ``related to'' 
personal cause could be broadly interpreted so that employees are 
miscategorized as ineligible for grade or pay retention.
    The proposed revision of the definition of demotion at an 
employee's request is intended to make clear that a management action 
that is prompted by an employee's misconduct or unacceptable 
performance cannot be the basis for entitlement to grade or pay 
retention. By law, an employee is not eligible for grade or pay 
retention if demoted for personal cause or at the employee's request. 
Our regulations on grade and pay retention cover not only employees who 
are subject to purely involuntary reductions in grade or pay (e.g., due 
to a reduction in force), but also employees whose reductions in grade 
or pay result from an employee's voluntary choice, if that choice was 
caused or influenced by a management action. This language is subject 
to broad interpretation to the benefit of employees. However, the 
interpretation cannot be so broad as to provide grade or pay retention 
to employees who voluntarily accept a reduction in grade in lieu of an 
adverse action based on misconduct or unacceptable performance.
    The proposed revision would clarify that an employee who accepts a 
reduction in grade after receipt of a notice of demotion or separation 
based on misconduct or unacceptable performance would be considered 
demoted at the employee's request. Similarly, an employee who 
voluntarily accepts a lower grade as part of a settlement in lieu of an 
adverse management action based on personal cause would be considered 
demoted at the employee's request. Accordingly, we are making the 
proposed revision in these final regulations, except that we are adding 
the word ``directly'' before ``related'' to emphasize that the 
management action is directly prompted by the employee's misconduct or 
unacceptable performance.

Section 536.205(b)(4)

    Two agencies questioned the justification for the proposed new 
rule, which prevents a retained rate employee's pay from being set 
below the maximum rate of the range for the employee's new position. 
One agency stated that the provision is contrary to the intent of the 
pay retention provision, since it provides for an increase in pay 
rather than just keeping the employee from losing money.
    The proposed rule is designed to address an inequity that exists 
for certain employees entitled to a retained rate who are moved to a 
position for which there is a higher basic pay rate range. Under the 
pay retention rules, if the employee remains in the same position, the 
retained rate will eventually fall below the maximum (step 10) rate, 
and the employee will become entitled to that maximum rate. However, 
if, while still entitled to a retained rate, the employee is moved to a 
different position for which a higher basic pay rate range applies 
(e.g., from a regular General Schedule rate range to a special rate 
range), the employee's pay could be slotted into the new rate range at 
a rate below the maximum rate. (See 5 CFR 536.205(b)(1)-(2).) In 
contrast, if the employee had already been at step 10 at the time of 
the movement, he would have been entitled to the step 10 rate in the 
new rate range. (See 5 CFR 530.306(e).) Since the maximum rate of the 
applicable range is the target rate for a retained rate employee, it 
makes sense to ensure that the employee is treated no worse than an 
employee receiving such maximum rate. We believe the proposed rule is 
equitable and appropriate and we are retaining it in these final 
regulations.

Overtime and Other Premium Pay

Section 550.103--Administrative Workweek

    An individual requested clarification regarding the definition of 
administrative workweek-namely, do the seven consecutive 24-hour 
periods correspond to seven consecutive ``days'' as defined in this 
section? The answer is yes. The same ``day'' (a 24-hour period, not 
necessarily a calendar day) used in computing an employee's daily 
overtime entitlements must also be used in establishing the employee's 
administrative workweek. We have revised the definition of 
administrative workweek to directly link to the definition of day.

Section 550.103--Premium Pay

    An agency suggested that the word ``earned'' be inserted before 
``compensatory time off'' in the definition of premium pay in 
Sec. 550.103. We agree that the intent was to include ``earned'' 
compensatory time off in the definition of premium pay, since the value 
of compensatory time off when earned is used in applying premium pay 
caps and in determining the value of unused compensatory time off when 
an employee becomes entitled to a cash payment (e.g., at separation). 
Accordingly, we have revised the definition to clarify this. However, 
to assist users of the regulations, we have moved the second sentence 
of the definition, which dealt with how to determine the dollar value 
of compensatory time off, to the sections of the regulations dealing 
specifically with compensatory time off. Thus, a new paragraph is being 
added to Secs. 550.114 and 551.531 in these final regulations.
    A union objected to the proposal to clarify that compensatory time 
off is considered premium pay for purposes of applying biweekly and 
annual pay caps. It stated that employees may never receive pay for 
compensatory time off earned, since the employee is instead compensated 
by time off from his or her regular work schedule at a later date. The 
union concluded that other forms of premium pay should not be limited 
due to the accumulation of compensatory time off that may never be 
converted to pay.
    The proposed inclusion of compensatory time off earned in the 
definition of premium pay is consistent with the longstanding policy of 
the Government. Many years ago, the Comptroller General found that 
compensatory time off should be

[[Page 69167]]

assigned a dollar value and used in applying aggregate pay caps. (See 
26 Comp. Gen. 750 (1947) and 37 Comp. Gen. 362 (1957).) Compensatory 
time off is converted to dollars when an employee separates (or 
otherwise becomes eligible) using the overtime rate in effect at the 
time the hours were earned.
    However, we note that, for employees covered by (nonexempt from) 
the Fair Labor Standards Act (FLSA) overtime provisions, overtime pay 
and compensatory time off earned in lieu of overtime pay are not 
considered to be ``premium pay'' under title 5, United States Code. 
This means that overtime pay and earned compensatory time off for FLSA-
covered employees are disregarded when applying various pay caps, 
including the premium pay caps in 5 U.S.C. 5547. Thus, the inclusion of 
compensatory time off in the definition of premium pay has relevance 
only for FLSA-exempt employees. To assist users of the regulations, we 
are adding a sentence to the definition of premium pay to clearly state 
that FLSA overtime pay and compensatory time off earned in lieu of such 
overtime pay are excluded.

Sections 550.112(k)(1) and 551.431(a)(1)

    An agency commented that the standards used to determine hours of 
standby duty are incomplete. As an example, the agency pointed out that 
an employee who is restricted to a ship may still have noncompensable 
off-duty hours while so restricted. It recommended that the proposed 
Sec. 550.112(k)(1) and a parallel rule in the FLSA regulations at 
Sec. 551.431(a)(1) be revised to more clearly consider whether the 
employee is restricted to an area because of an agency's need for the 
employee to remain in a constant state of readiness to perform work, as 
opposed to other reasons. It specifically cited OPM's standby duty 
premium pay regulations (5 CFR 550.143(a)(1)) as providing preferred 
language.
    We agree that clarification is needed. There are situations where 
an employee may be relieved from duty but have limited mobility because 
of geographic isolation. For example, an employee may be temporarily 
assigned to a ship or to a post in a remote wildland area. Also, an 
employee may actually reside temporarily or indefinitely on agency 
premises adjacent to his or her work site. In such cases, the employee 
would be considered officially on duty only when the employee is 
required to work or is placed in a standby status by the agency. If an 
employee is relieved from duty and free to pursue personal activities 
(though, for practical reasons, limited in where he or she may go), the 
employee is not in a duty status and the hours are not compensable.
    For example, an employee on a ship is not in a duty status if he or 
she is relieved from duty, released from his specific work station or 
post of duty, and allowed to pursue personal activities elsewhere on 
the ship. The fact that some restrictions may be placed on an 
employee's personal activities does not mean that the employee must be 
placed in duty status. For instance, certain work-related limitations 
such as restrictions on alcohol consumption or use of medication are 
not a basis for finding that an employee's activities are substantially 
limited. Accordingly, we are revising the proposed Sec. 550.112(k) and 
making parallel changes in Sec. 551.431(a) to provide appropriate 
clarification. (Note: If an employee in a nonduty status is called back 
to the work station to perform irregular or occasional overtime work, 
the employee is entitled to a minimum of 2 hours of overtime pay, 
consistent with 5 U.S.C. 5542(b)(1).)

Section 550.112(l)

    A union commented that time in an ``on-call'' status should be 
considered hours of work because of the significant restrictions placed 
on the employee. The union stated that standby status and on-call 
status are not distinguishable.
    The proposed rule in Sec. 550.112(l) reflects the Government's 
longstanding policy and practice. (See Comptroller General decisions B-
190369, February 23, 1978, and B-205118, March 8, 1982, and Federal 
Labor Relations Authority decision 51 FLRA No. 105, May 24, 1996.) We 
believe there is a discernible distinction between on-call status and 
standby status based on the nature of the restrictions placed upon the 
employee. We further believe that on-call hours during which the 
employee is under limited restrictions should not be compensable as 
hours of work. We are including the proposed Sec. 550.112(l) without 
change in these final regulations.

Section 550.112(m)(3)

    An individual inquired regarding OPM's policy on when sleep time 
constitutes compensable hours of work. In referencing the proposed rule 
in Sec. 550.112(m), we realized that the use of the term ``tours of 
duty'' in paragraph (3) is inappropriate, since it is a defined term in 
subpart A (see Sec. 550.103) that encompasses only regularly scheduled 
hours. The sleep time rule operates based on the length of the 
employee's work shift, without regard to whether the hours involved are 
regularly scheduled or irregular. Therefore, we have substituted the 
term ``work shifts'' in place of ``tours of duty'' in 
Sec. 550.112(m)(3). For consistency, parallel changes are made in 
Sec. 551.432 of OPM's FLSA overtime regulations.

Section 550.162(f)

    A union stated its agreement with the proposed new paragraph (f) in 
Sec. 550.162, which protects the status of employees receiving annual 
premium pay (i.e., administratively uncontrollable overtime pay and 
standby duty premium pay) who suffer an on-the-job injury resulting in 
entitlement to workers' compensation benefits. An agency requested 
clarification of the proposed provision in paragraph (f)(3) since some 
agency reviewers incorrectly interpreted the language to require 
payment of annual premium pay during periods of leave without pay. It 
recommended that paragraph be reorganized to distinguish between 
``authorization'' of premium pay (which has an impact on retirement 
benefit computations, but no pay implications) and actual payment of 
premium pay.
    While this matter was explained in the supplementary information 
section of the notice of proposed regulations, we agree that the 
regulatory text should be further clarified. We have made appropriate 
changes in these final regulations.

Section 551.423(a) and Section 410.402(d)

    We received questions regarding how to reconcile apparent 
inconsistencies between Sec. 551.423(a)(2) and Sec. 410.402(d). In the 
proposed regulations, we had modified Sec. 551.423(a)(2) by adding a 
cross reference to Sec. 410.402(d). We agree that the two sections 
appear to be inconsistent with respect to the relationship between 
performance improvement and creditability of training hours as hours of 
work. Section 410.402(d) requires that, for training hours outside 
regular working hours to be considered hours of work, the training in 
question must be intended to improve an employee's performance up to 
the fully successful level or to help the employee to perform newly 
assigned duties. In contrast, Sec. 551.423 uses less limiting language, 
saying that the training is intended to improve the employee's 
performance in his or her current position.
    To address this inconsistency, we are removing the specific rules 
in Sec. 410.402(d) and replacing them with a cross reference to 
Sec. 551.423 and a

[[Page 69168]]

sentence clarifying that the part 410 prohibitions on premium pay 
during training do not apply to FLSA overtime pay. In addition, we are 
revising the definition of directed to participate in 
Sec. 551.423(b)(1) to clarify that the fact that an agency pays for all 
or part of the expenses of training is not a basis for deciding whether 
the training was directed. In many cases, an agency may fund training 
that is requested by the employee on his or her own initiative. If the 
training is voluntary, as opposed to being required by the agency, the 
employee may not be credited with overtime hours of work for time spent 
in that training.

Section 551.501(a)(5)

    An agency commented that the supplementary information section of 
the proposed regulations included an incorrect citation in the 
description of the proposed revision of Sec. 551.501(a)(5). 
Specifically, the referenced title 4 is in the D.C. Code, not the 
United States Code.
    We agree that the citation was incorrect. The pay provisions for 
Secret Service Uniformed Division and Park Police officers are 
contained in title 4 of the D.C. Code. (There was no error in the 
regulatory text.)

Section 551.512

    An individual commented that the language describing the ``boosted 
hour method'' in proposed Sec. 551.512(d)(3) was confusing.
    We agree. When we reviewed the proposed new paragraph (d) in 
Sec. 551.512, we realized that the instructions on computing Fair Labor 
Standards Act (FLSA) overtime pay in cases involving nondiscretionary 
bonuses were flawed. In these final rules, we provide clarification by 
addressing the distribution of a group bonus separately from the 
computation of overtime pay in an individual bonus situation. We are 
providing the rules for computing FLSA overtime pay in cases involving 
nondiscretionary bonuses in a separate, new section, Sec. 551.514. 
Paragraph (b) of that section covers individual computation methods, 
while paragraph (c) covers the distribution of a group bonus. We 
revised the provisions generally to use more precise language. In 
addition, for individual bonus situations, we have added a bonus hourly 
rate method in Sec. 551.514(a)(2), which is based on a method found in 
the Department of Labor's FLSA regulations. (See 29 CFR 778.209.)
    As part of our efforts to clarify the treatment of bonuses under 
the FLSA overtime regulations, we have made one other conforming 
change. We are amending Sec. 551.511(b)(3) to reference the term 
``discretionary cash awards or bonuses.'' (In Sec. 551.514, we refer to 
Sec. 551.511(b)(3) to contrast nondiscretionary bonuses to 
discretionary bonuses.)

Severance Pay

Section 550.703--Immediate Annuity

    A union commented regarding the proposal to revise the definition 
of immediate annuity to clarify that it includes any voluntarily 
postponed annuity (such as a Minimum Retirement Age (MRA) plus 10 years 
(MRA + 10) postponed annuity under the Federal Employees Retirement 
System (FERS)). The union recommended that an annuity entitlement 
should bar severance pay only if the employee is actually beginning to 
receive annuity payments within 1 month after separation.
    The current definition of immediate annuity in Sec. 550.703 already 
provides that a postponed MRA+10 FERS annuity under Sec. 842.204 is 
considered an immediate annuity. This rule is based on the law, which 
requires that severance pay be barred to any individual who has 
``fulfilled the requirements for immediate annuity.'' The proposed 
revision makes clear that the term immediate annuity for severance pay 
purposes also encompasses any deferred annuity (i.e., an annuity where 
eligibility is reached after separation) that begins to accrue within 1 
month after separation, including such a deferred MRA+10 annuity under 
Sec. 842.212(b) whose commencing date is postponed. (Paragraph (a) of 
the current definition already encompasses deferred annuities that 
begin accruing within 1 month after separation. However, paragraph (b), 
which deals with MRA+10 annuities with postponed commencing dates, 
specifically references only non-deferred MRA+10 annuities. Thus, 
clarification is needed.) Accordingly, we have decided to go forward 
with the proposed revision of the definition of immediate annuity in 
these final regulations.

Section 550.703--Nonqualifying Appointment

    An individual pointed out that paragraph (f)(5) in the definition 
of nonqualifying appointment referenced an obsolete appointing 
authority-namely, limited executive assignments under part 305. 
Accordingly, we are deleting that paragraph and renumbering the 
succeeding paragraphs.

Section 550.703--Qualifying Appointment

    An agency proposed revising the definition of qualifying 
appointment to clarify that the voluntary movement from a qualifying 
permanent appointment to a time-limited appointment does not adversely 
affect an otherwise eligible employee's entitlement to severance pay 
upon expiration of the time-limited appointment.
    We do not believe further clarification is needed. The current 
definitions of involuntary separation and qualifying appointment both 
clearly state that a separation resulting from the expiration of a 
time-limited appointment that took effect within 3 calendar days after 
a separation from a qualifying permanent appointment is qualifying, 
without any condition that the first separation be on an involuntary 
basis. Prior to 1990, OPM regulations did provide that a time-limited 
appointment could be qualifying only if it followed an involuntary 
separation from a permanent appointment. However, as the result of a 
court case, OPM revised the severance pay regulations (i.e., the above-
mentioned definitions). The current rules have been in effect since 
March 1990. (See 54 FR 23215, May 31, 1989, and 55 FR 6591, February 
26, 1990, for explanations given in proposed and final rules.)

Section 550.704

    An agency requested that Sec. 550.704 (dealing with eligibility for 
severance pay) be amended to reference the provisions in 5 U.S.C. 
5595(h) that prohibit payment of severance pay to certain employees 
transferring to nonappropriated fund positions.
    We already addressed this issue in the proposed regulations in 
Sec. 550.709(f). We placed the provision in Sec. 550.709 (dealing with 
the payment of severance pay) because we believe the bar on severance 
pay during an employee's time in a nonappropriated fund position is 
more properly viewed as a suspension of payments. Under 5 U.S.C. 
5595(h), severance payments may, under certain conditions, be 
``resumed'' upon involuntary separation from the nonappropriated fund 
position.

Section 550.706

    An agency requested that we further clarify the rule in 
Sec. 550.706 regarding when a resignation may be treated as an 
involuntary separation for severance pay purposes. The agency was 
concerned about resignations following notice of a proposed removal for 
(1) failure to accept a directed reassignment

[[Page 69169]]

to a new location and (2) medical inability to perform duties. It asked 
whether a final removal action needed to be issued before such a 
resignation could be qualifying for severance pay purposes.
    The answer is that a final involuntary removal action is not 
necessary to qualify for severance pay if an employee resigns after 
receipt of the specific written notice of proposed removal. This is no 
different from resignation after receipt of a proposed removal as part 
of a reduction in force. Since we believe that it is clear that the 
broad language in Sec. 550.706(a)(1) encompasses all specific notices 
of proposed involuntary separations (as defined in Sec. 550.703), 
including involuntary separations involving the circumstances cited by 
the agency, we are making no change in the proposed regulation.
    A union opposed the proposed changes in Sec. 550.706, stating that 
the changes add unnecessary barriers to getting severance pay for 
employees who resign in the face of a separation and meet the 
``substantive requirements.'' We disagree. The proposed changes merely 
provide a clearer definition of what constitutes a formal, official 
notice that would trigger entitlement to severance pay, consistent with 
current OPM policies. By law, severance pay entitlement is based on an 
involuntary separation. In regulating the law, OPM does allow 
resignations to be treated as involuntary separations for severance pay 
purposes if an official notice informs the employee that an involuntary 
separation will occur. If a notice does not contain the elements (e.g., 
nature of action, effective date of separation) described in the 
proposed revision, that shows that the involuntary separation decision 
has not been finalized. An uncertain separation decision cannot be the 
basis for severance pay upon resignation, since that would be contrary 
to the law's requirements. The types of specific notices of involuntary 
separation that commonly trigger severance pay-e.g., a reduction-in-
force separation notice or a notice of separation for failure to accept 
a geographic reassignment--already routinely include the required 
elements.

Section 550.709-710

    An agency suggested further revising Sec. 550.710 to clarify which 
agency is responsible for making severance payments when (1) an 
employee has a qualifying temporary appointment (i.e., appointed within 
3 days following a qualifying permanent appointment) and (2) an 
employee's severance pay resumes following a temporary suspension 
during one or more nonqualifying temporary appointment.
    We agree that clarification in this area would be helpful. The 
answer is that severance payment responsibility rests with the agency 
employing the individual at the time of the involuntary separation that 
triggered the severance pay entitlement. (See 5 U.S.C. 5595(b).) In the 
case of an employee with a qualifying temporary appointment, the 
severance pay entitlement is based on the separation from the temporary 
appointment, not on the separation from the preceding permanent 
appointment. (See definition of involuntary separation in 
Sec. 550.703.) Accordingly, we are adding language in paragraphs (b) 
and (c) of Sec. 550.709 to make clear that the agency employing the 
employee in a qualifying temporary appointment is responsible for 
making severance payments. We are also adding a sentence in 
Sec. 550.710 to make clear that, when severance payments resume after a 
period of suspension during a nonqualifying temporary appointment, 
severance pay liability continues to rest with the agency originally 
responsible for the severance payments. In addition, we have corrected 
several erroneous regulatory citations in the proposed Sec. 550.709(a).
    We are also making changes in Sec. 550.709(g) because of recent 
changes in law. Under section 1104(a) of the National Defense 
Authorization Act for Fiscal Year 2000 (Public Law 106-65, October 5, 
1999), the authority of the Department of Defense to pay lump-sum 
severance payments to certain employees under 5 U.S.C. 5595(i) was 
extended to cover employees separating through September 30, 2003. The 
authority had been scheduled to expire on September 30, 1999. In 
addition, section 3243 added a new paragraph (j) to section 5595, which 
provides that the Department of Energy may pay severance pay in a lump 
sum to certain employees whose entitlement derives from the 
establishment of the National Nuclear Security Administration. We are 
amending Sec. 550.709(g) to provide a general reference to lump-sum 
severance payments expressly authorized by law, rather than attempting 
to include specific references to such laws.

Back Pay

Section 550.803

    A union opposed the proposed changes in the definitions of pay, 
allowances, and differentials and employee. It specifically objected to 
the proposed exclusion of retirement investment fund contributions and 
of post-separation payments (such as lump-sum payments for annual 
leave, severance payments, and retirement annuity payments). The union 
stated that no explanation was given for excluding employee and agency 
contributions to a retirement investment fund and that this would 
prevent the employee from being made financially whole. The union also 
stated that OPM provided no rationale or legal support for the 
exclusion of post-separation payments.
    Regarding the exclusion of retirement investment fund 
contributions, we explained in the supplementary information section of 
the proposed regulations (63 FR 64883) that the correction of agency 
errors affecting an employee's Thrift Savings Plan account is subject 
to specific and independent laws and regulations. (See 5 U.S.C. 8432a 
and 5 CFR parts 1605 and 1606.) Furthermore, the Comptroller General 
considered this issue and found that pay, allowances, and differentials 
under the back pay law do not include earnings on contributions to the 
Thrift Savings Fund. (See 68 Comp. Gen. 220 (1989).) Therefore, we 
believe the exclusion of retirement investment fund contributions is 
necessary and appropriate.
    Regarding the exclusion of post-separation benefits, the proposed 
definition reflects OPM's interpretation of the back pay law. Section 
5596(b)(1) of title 5, United States Code, states that the back pay 
provisions apply to an ``employee of an agency'' who is affected by an 
unjustified or unwarranted ``personnel action'' resulting in the 
withdrawal or reduction of ``pay, allowances, or differentials of the 
employee.'' Also section 5596(b)(1)(A) refers to the ``period for which 
the personnel action was in effect'' and to the amount the ``employee'' 
normally would have received during that period. We believe the term 
``employee'' clearly refers to an individual currently employed by a 
Federal agency, consistent with the definition in 5 U.S.C. 2105. (This 
would include both an individual who was actually employed or who was 
deemed to be employed based on a retroactive reinstatement.) 
Furthermore, the terms ``personnel action'' and ``pay, allowances, and 
differentials'' are commonly used in connection with individuals in an 
active employment status.
    In addition, section 5596(b)(1)(B) states that an employee who is 
entitled to back pay during a period when an erroneous personnel action 
was in effect ``is deemed to have performed service for the agency 
during that period.''

[[Page 69170]]

Clearly, Congress would not have included such a requirement if it 
intended the back pay law to cover benefits to which an employee is 
entitled after a valid separation from service.
    It is true that the existing back pay regulations define the term 
employee to mean an ``employee or former employee of an agency.'' 
However, OPM understands the reference to a ``former employee'' as 
merely making clear that an individual separated from Federal service 
may file a claim for and receive back pay for periods of actual or 
deemed employment. (Deemed employment refers to periods during which an 
individual is retroactively placed in an employment status and is 
deemed to have been performing service as part of a corrective action 
by an authorized authority--for example, a period during which an 
erroneous separation was in effect or an individual was erroneously 
denied reinstatement based on a statutory reemployment right.) We note 
that the existing regulatory definition of pay, allowances, and 
differentials includes ``monetary and employment benefits'' to which an 
employee is entitled based on the ``performance of a Federal 
function,'' which OPM understands to refer to compensation for work by 
an active employee. In the supplementary information for the final 
regulations on back pay published in 1981 (46 FR 58271, December 1, 
1981), we referred to the definition of pay, allowances, and 
differentials and stated that ``benefits received following retirement 
are not included because they are not received for the period covered 
by the corrective action.'' Finally, we point to the former Federal 
Personnel Manual, which clarified the definition of employee as 
follows:

    ``Employee'' means an employee or former employee of an agency. 
The back pay law applies to employees or former employees who, while 
employed by the Federal Government [emphasis in original], were 
affected by an unjustified or unwarranted personnel action that 
resulted in a loss of pay and to former employees who are improperly 
denied a statutory reemployment right. [See former Federal Personnel 
Manual Supplement 990-2, S8-3, page 550-57, April 20, 1984.]

    Accordingly, as we proposed, we are clarifying the definitions of 
employee and pay, allowances, and differentials consistent with OPM's 
past practice and policy. The defining of these statutory terms is 
within OPM's broad regulatory authority in 5 U.S.C. 5596. We note that 
this does not mean an individual is not entitled to corrective payments 
if it is found that he or she was paid less than the amount due the 
individual for severance pay, for a lump-sum payment for annual leave, 
or for retirement benefits. Under the law governing the payment in 
question, the individual is entitled to be paid correctly, if a timely 
claim is filed. However, the provisions of section 5596, including that 
section's interest provisions, are not applicable in such cases.

Appendix A

    An agency suggested that, in appendix A to subpart H of part 550, 
we clarify the definition of basic pay--e.g., whether it includes 
locality pay.
    We did not intend that appendix A contain a restatement of all the 
rules governing the various deductions that might apply to a back pay 
award. While the deduction table in appendix A uses the term basic pay 
in reference to retirement and life insurance deductions, it is 
expected that readers would understand that they must use the normal 
definition of that term as set forth in the applicable retirement and 
life insurance laws and regulations. For example, locality pay is 
included under those definitions. The second sentence of appendix A 
already states: ``To compute these deductions, an agency must determine 
the appropriate base or follow other rules.'' We have revised this 
sentence by adding the words ``consistent with applicable law.''

Commuting Area

Sections 550.703, 575.103, and 575.203

    A union objected to the proposed revision of the definition of 
commuting area in various regulatory parts dealing with severance pay, 
recruitment bonuses, and relocation bonuses. The union stated four 
objections, which we will review and respond to in the following 
paragraphs.
    First, the union stated that the proposed regulation would remove 
existing language referring to the commuting area as the area that 
``normally is considered one area for employment purposes.'' The union 
believes this language is helpful in establishing that a commuting area 
should be based on ``normal objective expectations'' or ``common 
general understandings,'' not defined arbitrarily.
    We agree that agencies should take into account common general 
expectations and understandings of what a normal commuting trip is for 
the particular work site in question, and we will revise the proposed 
definition to include language stating that an agency must define a 
commuting area based on the generally held expectations of the local 
community. However, we believe it does not make sense to use a single 
commuting area for a metropolitan area that includes multiple Federal 
work sites that can be at opposite ends of the metropolitan area. For 
example, both Leesburg, Virginia, and Columbia, Maryland, could be 
considered to be within the Washington, DC, commuting area. An 
individual could live in Baltimore and work in Columbia and have a 
reasonable commuting trip. However, if the work site were changed to 
Leesburg, an agency could appropriately find that Baltimore is outside 
the normal commuting area for the Leesburg work site. This example 
shows that it is essential to base commuting areas on the specific work 
site in question and to consider the location of the employee's 
residence relative to that work site. We note that the term 
``employee's commuting area'' is used in the definition of reasonable 
offer in the existing severance pay regulations, showing that the 
location of the individual employee's residence is intended to be a 
consideration.
    Second, the union stated that the proposed regulation gives 
agencies sole and unfettered discretion in establishing the commuting 
area. The union stated that the definition of the commuting area should 
be reached in negotiation with the affected employees' exclusive 
representatives.
    Under existing regulations, it is the employing agency that must 
make a determination regarding the boundaries of the commuting area in 
order to apply the applicable law and regulations. The proposed 
regulation merely makes this responsibility clear. The proposed 
regulation does not give agencies unlimited discretion in establishing 
the commuting area. These decisions may not be made on an arbitrary or 
capricious basis. We note that the proposed regulation requires that 
the commuting area be an area surrounding the work site that 
``encompasses the localities where people live and reasonably can be 
expected to travel back and forth daily.'' As previously stated, we 
will add language referencing the need to base decisions about 
commuting areas on the generally held expectations of people in the 
local community to emphasize that the interpretation of what is 
reasonable should be consistent with those expectations. The proposed 
language does not limit the normal application of the laws governing 
employees' bargaining rights.
    Third, the union stated that the proposed regulation added a 
``subjective'' element by using the ``significantly more burdensome'' 
standard in judging whether an employee who lives outside the

[[Page 69171]]

standard commuting area for a new work site should be considered to 
live within or outside the commuting area for the purpose of the 
benefit in question. It pointed out that the proposed regulation is 
based on the employee's current commuting trip, even if the current 
residence happens to be only a temporary one.
    It is necessary to take into account where an employee lives 
relative to a new work site to ensure equitable treatment of employees. 
For example, an employee may work in Washington, DC, but choose to live 
in and commute from Fredericksburg, Virginia, which would be outside 
the normal commuting area for a work site in DC. If the agency changed 
the employee's duty station from Washington, DC, to Fredericksburg, it 
would not be reasonable to award a benefit like severance pay based on 
a finding that the employee's new work site is outside the commuting 
area for the old work site. In this example, the employee is closer to 
the new work site than the old work site and would not be compelled to 
move in order to accept the job at the new work site. Under a different 
but less common scenario, an employee may live outside the standard 
commuting area for a new work site but still be as close or closer in 
terms of commuting time and distance to the new work site than to the 
old work site. If a commuting trip is not significantly more burdensome 
than before the duty station change, we believe the employee should not 
be considered to be outside the commuting area for the new work site. 
We agree with the union's point that these decisions should not be 
based on an employee's temporary residence. We are adding language to 
address this. We note that reasoned judgment will have to be applied by 
the authorized agency official in determining whether or not a 
residence is truly temporary.
    Fourth, the union objected to the criterion relating to whether an 
employee would be compelled to change his or her place of residence 
because of a change in duty station. It stated that this is too high a 
standard. The union was concerned that an agency may argue that a 2-
hour commute each way does not compel an employee to move. It was also 
concerned about the vagueness of the term ``other relevant factors'' 
and the lack of specific mention of factors such as traffic patterns, 
location of a child's school or day care, and location of medical 
facilities.
    The proposed compelled-to-move rule is not a new rule, but is based 
on longstanding policy. OPM and its predecessor, the Civil Service 
Commission, have long used this rule to ensure that severance pay is 
not awarded in cases where duty station changes did not actually compel 
an employee to move. (For example, see Comptroller General decisions B-
182300 (January 16, 1975, and December 4, 1975) and B-2105424 (June 6, 
1983), in which the compelled-to-move criterion was used in 
adjudicating severance pay claims.)
    A similar rule is used under the Civil Service Retirement System 
(CSRS) and the Federal Employees Retirement System (FERS) for employees 
filing for discontinued service retirement (i.e., early retirement 
based on involuntary separation). An employee's separation is 
considered involuntary for discontinued service retirement purposes if 
he or she refuses to accept a directed reassignment outside the 
commuting area. Under the retirement rules, it must be determined that 
complying with the duty station change would ``compel the employee to 
change his or her residence in order to continue employment.'' (See 
CSRS and FERS Handbook for Personnel and Payroll Offices, chapter 44, 
sections 44A2.1-3 and 44B1.1-1C.)
    We acknowledge that reasoned judgment is necessary to apply this 
rule. Since a variety of interrelating factors may come into play in 
deciding whether an employee would be compelled to move depending on 
the specific area and the specific employee, it is not possible to 
prescribe a precise, works-in-every-situation rule. The ``other 
relevant factors'' language is necessary to allow the agency official 
to consider all possibly relevant factors, including the factors cited 
by the union and others that may work to the employee's benefit. Any 
review of an agency official's decision regarding the compelled-to-move 
issue will certainly be based on whether it is consistent with what a 
reasonable person would conclude. We expect that agencies will apply 
this rule in a fair and equitable way.
    In summary, we are proceeding with the proposed change in the 
definition of commuting area as used in the regulations for severance 
pay, recruitment bonuses, and relocation bonuses; however, we have made 
some modifications in the proposed language to provide clarification 
and to respond to comments.

Changes Related to New Firefighter Regulations

    On November 23, 1998, we published interim regulations to implement 
statutory changes affecting the pay of Federal firefighters. (See 63 FR 
64589.) Some of those interim regulations affected the proposed 
regulations that are being made final through this notice. We are 
making appropriate changes consistent with the interim firefighter pay 
regulations.
    The proposed regulations added a new paragraph (g) to Sec. 550.111; 
however, the interim firefighter pay regulations added a different 
paragraph (g) and a subsequent regulation added a paragraph (h) (64 FR 
4520, January 29, 1999). Therefore, we are redesignating the proposed 
paragraph (g) as paragraph (i).
    The proposed regulations revised Sec. 550.707(b), but did not 
include a provision related to computing severance pay for firefighters 
with variable workweeks. The interim firefighter regulations included a 
change to address such firefighters in Sec. 550.707(b)(4). We are 
revising the proposed Sec. 550.707(b) to incorporate the firefighter 
provision.
    The proposed regulations included changes in Secs. 550.112(m) and 
551.432, which deal with when sleep time is considered hours of work 
for overtime purposes. These sections of the proposed regulations do 
not address firefighters paid under the new firefighter pay computation 
method established by 5 U.S.C. 5545b. Our position is that, for 
firefighters compensated under 5 U.S.C. 5545b, all official duty hours, 
including all sleep hours during official duty hours, are compensable 
hours for all pay purposes. The 2756-hour factor used in computing 
firefighter hourly rates under 5 U.S.C. 5545b already takes into 
account the existence of compensable sleep hours. We are revising 
Secs. 550.112(m) and 551.432 accordingly.
    The proposed regulations revised Sec. 551.501(a)(5), but did not 
include a reference to firefighters paid under 5 U.S.C. 5545b, as 
reflected in the interim firefighter pay regulations. We are revising 
Sec. 551.501(a)(5) to incorporate that reference.

Other Changes

    We are making some additional technical changes not included in the 
proposed regulations. These changes involve correction of obvious 
errors.
    In Sec. 550.1104(c)(2), we are inserting the word ``contesting,'' 
which was inadvertently left out when revisions were recently made in 
the salary offset regulations in subpart K of part 550. (See 63 FR 
72100, December 31, 1998, and compare to 5 U.S.C. 5514(a)(3).)
    In Sec. 550.1104(d)(2), we are correcting a typographical error. 
(The word ``account'' was misspelled as ``accont.'')

[[Page 69172]]

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 410, 530, 531, 536, 550, 551, 575, 
591, and 610

    Administrative practice and procedure, Claims, Education, Freedom 
of information, Government employees, Holidays, Law enforcement 
officers, Reporting and recordkeeping requirements, Travel and 
transportation expenses, Wages.

U.S. Office of Personnel Management.
Janice R. Lachance,
Director.

    Accordingly, OPM is amending parts 410, 530, 531, 536, 550, 551, 
575, 591, and 610 of title 5 of the Code of Federal Regulations as 
follows:

PART 410--TRAINING

    1. The authority citation for part 410 continues to read as 
follows:

    Authority: 5 U.S.C. 4101, et seq.; E.O. 11348, 3 CFR, 1967 
Comp., p. 275.

Subpart D--Paying for Training Expenses

    2. In Sec. 410.402, paragraph (d) is revised to read as follows:


Sec. 410.402  Paying premium pay.

* * * * *
    (d) Regulations governing overtime pay for employees covered by 
Fair Labor Standards Act (FLSA) during training, education, lectures, 
or conferences are found in Sec. 551.423 of this chapter. The 
prohibitions on paying premium pay found in paragraph (a) of this 
section are not applicable for the purpose of paying FLSA overtime pay.
* * * * *

PART 530--PAY RATES AND SYSTEMS (GENERAL)

    3. The authority citation for part 530 continues to read as 
follows:

    Authority: 5 U.S.C. 5305 and 5307; E.O. 12748, 56 FR 4521, 3 
CFR, 1991 Comp., p. 316;
    Subpart B also issued under secs. 302(c) and 404(c) of the 
Federal Employees Pay Comparability Act of 1990 (Pub. L. 101-509), 
104 Stat. 1462 and 1466, respectively;
    Subpart C also issued under sec. 4 of the Performance Management 
and Recognition System Termination Act of 1993 (Pub. L. 103-89), 107 
Stat. 981.

Subpart B--Aggregate Limitation on Pay

    4. In Sec. 530.202, the definition of estimated aggregate 
compensation is amended by removing the words ``is entitled'' and 
adding in their place the words ``is or is projected to be entitled'', 
and the definition of discretionary payment is revised to read as 
follows:


Sec. 530.202  Definitions.

* * * * *
    Discretionary payment means a payment that an agency has discretion 
to pay or not to pay to an employee, including a retention allowance 
but excluding any other payment that is preauthorized to be paid to an 
employee at a regular fixed rate each pay period.
* * * * *
    5. In Sec. 530.203, paragraph (c) is amended by removing the word 
``proved'' and adding in its place the word ``provided'', and a new 
paragraph (f) is added to read as follows:


Sec. 530.203  Administration of aggregate limitation on pay.

* * * * *
    (f) If an agency makes an incorrect estimate of aggregate 
compensation at an earlier date in the calendar year, the sum of an 
employee's remaining payments of basic pay (which may not be deferred) 
may exceed the difference between the aggregate compensation the 
employee has actually received to date in that calendar year and the 
rate for level I of the Executive Schedule. In this case, the employee 
will become indebted to the Federal Government for any amount paid in 
excess of the level I aggregate limitation. To the extent that the 
excess amount is attributable to amounts that should have been deferred 
and would have been payable at the beginning of the next calendar year, 
the debt will be extinguished on January 1 of the next calendar year. 
As part of the correction of the error, the excess amount will be 
deemed to have been paid on January 1 of the next calendar year (when 
the debt was extinguished) as if it were a deferred excess payment as 
described in Sec. 530.204 and must be considered part of the employee's 
aggregate compensation for the new calendar year.

Subpart C--Special Salary Rate Schedules for Recruitment and 
Retention

    6. In Sec. 530.303, paragraphs (d) and (i) are revised to read as 
follows:


Sec. 530.303  Establishing and adjusting special salary rate schedules.

* * * * *
    (d) All requests to establish or adjust special salary rate 
schedules must be transmitted directly to OPM's central office by the 
agency's headquarters. Each request must include a certification by the 
head of the agency (or another official designated to act on behalf of 
the head of the agency with respect to the given schedule) that the 
requested special salary rates are considered necessary to ensure 
staffing adequate to the accomplishment of the agency's mission.
* * * * *
    (i) The determination as to whether an employee is covered by a 
special salary rate schedule must be based on the employee's position 
of record and the official duty station for that position. For the 
purpose of this subpart, the employee's position of record and 
corresponding official duty station are the position and station 
documented on the employee's most recent notification of personnel 
action, excluding a notification associated with a new assignment that 
is followed immediately (i.e., within 3 workdays) by a reduction in 
force resulting in the employee's separation before he or she is 
required to report for duty at the new location. For an employee who is 
authorized to receive relocation allowances under 5 U.S.C. 5737 in 
connection with an extended assignment, the position and duty station 
associated with that assignment are the employee's position of record 
and official duty station.

PART 531--PAY UNDER THE GENERAL SCHEDULE

    7. The authority citation for part 531 continues to read as 
follows:

    Authority: 5 U.S.C. 5115, 5307, and 5338; sec. 4 of Pub. L. 103-
89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 Comp., p. 
316;
    Subpart B also issued under 5 U.S.C. 5303(g), 5333, 5334(a), and 
7701(b)(2);
    Subpart C also issued under 5 U.S.C. 5304, 5305, and 5553; 
sections 302 and 404 of FEPCA, Pub. L. 101-509, 104 Stat. 1462 and 
1466; and section 3(7) of Pub. L. 102-378, 106 Stat. 1356;
    Subpart D also issued under 5 U.S.C. 5335(g) and 7701(b)(2);
    Subpart E also issued under 5 U.S.C. 5336;
    Subpart F also issued under 5 U.S.C. 5304, 5305(g)(1), and 5553; 
and E.O. 12883, 58 FR 63281, 3 CFR, 1993 Comp., p. 682;
    Subpart G also issued under 5 U.S.C. 5304, 5305, and 5553; 
section 302 of the Federal Employees Pay Comparability Act of 1990 
(FEPCA), Pub. L. 101-509, 104 Stat. 1462; and E.O. 12786, 56 FR 
67453, 3 CFR, 1991 Comp., p. 376.

Subpart B--Determining Rate of Basic Pay

    8. In Sec. 531.203:

[[Page 69173]]

    A. Paragraph (d)(3) is amended by removing ``5303'' and adding in 
its place ``5305'', by removing ``Sec. 532.231'' and adding in its 
place ``part 532'', by adding ``(other than section 403 of FEPCA)'' 
after ``other legal authority'' and by removing ``(d)(2)(vi)'' and 
adding in its place ``(d)(2)(vii)'';
    B. Paragraph (c)(1)(ii) is amended by adding a new sentence at the 
end of the paragraph;
    C. The introductory text of paragraph (d)(2)(vii) is revised; and
    D. Paragraph (f) is revised.
    The addition and revisions read as follows:


Sec. 531.203  General provisions.

* * * * *
    (c) * * *
    (1) * * *
    (ii) * * * If the employee's highest previous rate was greater than 
the maximum rate for the grade in which pay is being fixed, the maximum 
rate of basic pay that may be paid to the employee is the maximum rate 
for that grade.
* * * * *
    (d) * * *
    (2) * * *
    (vii) A special rate established under 5 U.S.C. 5305 and part 530 
of this chapter, part 532 of this chapter, or other legal authority 
(other than section 403 of the Federal Employees Pay Comparability Act 
of 1990 (FEPCA) (Pub. L. 101-509, 104 Stat. 1465), unless, in a 
reassignment to another position in the same agency--
* * * * *
    (f) Simultaneous actions. (1) General pay adjustments must be 
processed before any individual pay action that takes effect at the 
same time. General pay adjustments include annual adjustments under 5 
U.S.C. 5303, adjustments in locality rates of pay under subpart F of 
this part, adjustments in special law enforcement adjusted rates of pay 
under subpart C of this part, adjustments in special salary rates under 
5 U.S.C. 5305 or similar provision of law (including section 403 of 
FEPCA), increases in retained rates under part 536 of this chapter, and 
increases in continued rates under subparts C and G of this part.
    (2) Pay adjustments (other than general pay adjustments) that take 
effect at the same time must be processed in the order that gives the 
employee the maximum benefit. When a position or appointment change and 
entitlement to a higher rate of pay occur at the same time, the higher 
rate of pay is deemed to be the employee's existing rate of basic pay.
* * * * *
    9. In Sec. 531.204, paragraph (a)(2) is revised to read as follows:


Sec. 531.204  Special provisions.

    (a) * * *
    (2) For the purpose of section 5334(b) of title 5, United States 
Code, an employee's ``existing rate of basic pay'' includes any 
applicable special rate established under section 5305 of title 5, 
United States Code, or law enforcement special rate established under 
section 403 of the Federal Employees Pay Comparability Act of 1990 
(FEPCA) (Pub. L. 101-509, 104 Stat. 1465).
* * * * *

Subpart C--Special Pay Adjustments for Law Enforcement Officers

    10. In Sec. 531.301, the definition of official duty station is 
revised to read as follows:


Sec. 531.301  Definitions.

* * * * *
    Official duty station means the duty station for an employee's 
position of record as indicated on his or her most recent notification 
of personnel action, excluding a new duty station for an assignment 
that is followed immediately (i.e., within 3 workdays) by a reduction 
in force resulting in the employee's separation before he or she is 
required to report for duty at the new location. For an employee who is 
authorized to receive relocation allowances under 5 U.S.C. 5737 in 
connection with an extended assignment, the temporary duty station 
associated with that assignment is the employee's official duty 
station.
* * * * *
    11. In Sec. 531.304:
    A. Paragraph (b)(4) is amended by removing the word ``and';
    B. Paragraph (b)(5) is amended by removing the period at the end of 
the paragraph and adding a semicolon and the word ``and'' in its place; 
and
    C. A new paragraph (b)(6) is added.
    The addition reads as follows:


Sec. 531.304  Administration of special law enforcement adjusted rates 
of pay.

* * * * *
    (b) * * *
    (6) Basic pay that a career appointee in the Senior Executive 
Service elects to continue while serving under certain Presidential 
appointments, as provided by 5 U.S.C. 3392(c)(1) and Sec. 317.801 of 
this chapter.
* * * * *

Subpart D--Within-Grade Increases

    12. In Sec. 531.407, paragraph (d) is revised to read as follows:


Sec. 531.407  Equivalent increase determinations.

* * * * *
    (d) Merit increases. For the purpose of applying section 5335 of 
title 5, United States Code, and this subpart, all or any portion of a 
merit increase, or a zero merit increase, authorized under former 
section 5404 of title 5, United States Code (which was repealed as of 
November 1, 1993, by Public Law 103-89), is an equivalent increase.

Subpart F--Locality-Based Comparability Payments

    13. In Sec. 531.602, paragraph (1) of the definition of employee 
and the definition of official duty station are revised to read as 
follows:


Sec. 531.602  Definitions.

* * * * *
    Employee means--
    (1) An employee in a position to which subchapter III of chapter 53 
of title 5, United States Code, applies and whose official duty station 
is located in a locality pay area within the continental United States, 
including a GM employee (as defined in Sec. 531.202); and
* * * * *
    Official duty station means the duty station for an employee's 
position of record as indicated on his or her most recent notification 
of personnel action, excluding a new duty station for an assignment 
that is followed immediately (i.e., within 3 workdays) by a reduction 
in force resulting in the employee's separation before he or she is 
required to report for duty at the new location. For an employee who is 
authorized to receive relocation allowances under 5 U.S.C. 5737 in 
connection with an extended assignment, the temporary duty station 
associated with that assignment is the employee's official duty 
station.
* * * * *
    14. In Sec. 531.606
    A. Paragraph (b)(4) is amended by removing the word ``and';
    B. Paragraph (b)(5) is amended by removing the period at the end of 
the paragraph and adding a semicolon and the word ``and'' in its place; 
and
    C. A new paragraph (b)(6) is added.
    The addition to read as follows:


Sec. 531.606  Administration of locality rates of pay.

* * * * *
    (b) * * *
    (6) Basic pay that a career appointee in the Senior Executive 
Service elects to continue while serving under certain Presidential 
appointments, as provided

[[Page 69174]]

by 5 U.S.C. 3392(c)(1) and Sec. 317.801 of this chapter.
* * * * *

PART 536--GRADE AND PAY RETENTION

    15. The authority citation for part 536 continues to read as 
follows:

    Authority: 5 U.S.C. 5361-5366; sec. 7202(f) of the Omnibus 
Budget Reconciliation Act of 1990 (Pub. L. 101-508), 104 Stat. 1338-
336; sec. 4 of the Performance Management and Recognition System 
Termination Act of 1993 (Pub. L. 103-89), 107 Stat. 981; 
Sec. 536.307 also issued under 5 U.S.C. 552, Freedom of Information 
Act, Pub. L. 92-502.

Subpart A--Definitions; Coverage and Applicability

    16. In Sec. 536.102, the definition of rate of basic pay is amended 
by removing the words ``or any kind'' and adding in their place the 
words ``of any kind'', and the definition of demotion at the employee's 
request is revised to read as follows:


Sec. 536.102  Definitions.

* * * * *
    Demotion at an employee's request means a reduction in grade that 
is initiated by the employee for his or her benefit, convenience, or 
personal advantage. A demotion that is caused or influenced by a 
management action is not considered to be at an employee's request, 
except that a voluntary demotion in response to a management action 
directly related to personal cause is considered to be at the 
employee's request.
* * * * *

Subpart B--Determination of Retained Grade and Rate of Basic Pay; 
Loss of, or Termination of Eligibility


Sec. 536.203  [Amended]

    17. In Sec. 536.203, paragraph (b) is amended by removing the 
misspelled word ``immediatley'' and adding in its place ``immediately'.
    18. In Sec. 536.205, paragraph (a)(2) is amended by removing the 
reference to ``531.204(d)(4)'' and adding in its place 
``531.204(e)(4)'', and a new paragraph (b)(4) is added to read as 
follows:


Sec. 536.205  Determination of rate of basic pay.

* * * * *
    (b) * * *
    (4) If an employee moves to another position at the same grade 
while entitled to pay retention, the employee's rate of basic pay after 
movement may not be less than the maximum rate of basic pay for the 
newly applicable rate range.
* * * * *

PART 550--PAY ADMINISTRATION (GENERAL)

Subpart A--Premium Pay

    19. 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.

    20. In Sec. 550.101
    A. Paragraph (a)(2) is revised;
    B. The introductory text of paragraph (d) is amended by adding 
``Sunday,'' after ``night,';
    C. Paragraphs (d)(3) and (d)(7) are removed;
    D. Paragraphs (d)(4) through (d)(6) are redesignated as (d)(3) 
through (d)(5), respectively;
    E. Paragraphs (d)(8) and (d)(9) are redesignated as (d)(6) and 
(d)(7), respectively; and
    F. Paragraph (d)(1) is revised.
    The revisions read as follows:


Sec. 550.101  Coverage and exemptions.

    (a) * * *
    (2) The sections in this subpart incorporating special provisions 
for certain types of work (Secs. 550.141 through 550.164, inclusive) 
apply also to each employee of the judicial branch or the legislative 
branch who is subject to subchapter V of chapter 55 of title 5, United 
States Code.
* * * * *
    (d) * * *
    (1) February 13, 1911, as amended (36 Stat. 899, as amended; 19 
U.S.C. 261, 267), involving customs inspectors and canine enforcement 
officers;
* * * * *
    21. Section 550.102 is revised to read as follows:


Sec. 550.102  Entitlement.

    A department (and for the purpose of Secs. 550.141 through 550.164, 
inclusive, a legislative or judicial branch agency) must determine an 
employee's entitlement to premium pay consistent with subchapter V of 
chapter 55 of title 5, United States Code.
    22. In Sec. 550.103, the definition of day is added in alphabetical 
order, and the definitions of administrative workweek, agency, law 
enforcement officer, and premium pay are revised to read as follows:


Sec. 550.103  Definitions.

* * * * *
    Administrative workweek means any period of 7 consecutive days (as 
defined in this section) designated in advance by the head of the 
agency under section 6101 of title 5, United States Code.
    Agency means--
    (1) A department as defined in this section; and
    (2) A legislative or judicial branch agency which has positions 
that are subject to subchapter V of chapter 55 of title 5, United 
States Code.
* * * * *
    Day (for overtime pay purposes) means any 24-hour period designated 
by an agency within the administrative workweek applicable to the 
employee. A day need not correspond to the 24-hour period of a calendar 
day. If the agency has not designated another period of time, a day is 
a calendar day.
* * * * *
    Law enforcement officer means an employee who--
    (1) Is a law enforcement officer within the meaning of 5 U.S.C. 
8331(20) (as further defined in Sec. 831.902 of this chapter) or 5 
U.S.C. 8401(17) (as further defined in Sec. 842.802 of this chapter), 
as applicable;
    (2) In the case of an employee who holds a secondary position, as 
defined in Sec. 831.902 of this chapter, and is subject to the Civil 
Service Retirement System, but who does not qualify to be considered a 
law enforcement officer within the meaning of 5 U.S.C. 8331(20), would 
so qualify if such employee had transferred directly to such position 
after serving as a law enforcement officer within the meaning of such 
section;
    (3) In the case of an employee who holds a secondary position, as 
defined in Sec. 842.802 of this chapter, and is subject to the Federal 
Employees Retirement System, but who does not qualify to be considered 
a law enforcement officer within the meaning of 5 U.S.C. 8401(17), 
would so qualify if such employee had transferred directly to such 
position after performing duties described in 5 U.S.C. 8401(17)(A) and 
(B) for at least 3 years; and
    (4) In the case of an employee who is not subject to either the 
Civil Service Retirement System or the Federal Employees Retirement 
System--
    (i) Holds a position that the agency head (as defined in 
Secs. 831.902 and 842.802 of this chapter) determines would satisfy 
paragraph (1), (2), or (3) of this definition if the employee were 
subject to the Civil Service Retirement System or the Federal Employees 
Retirement System (subject to OPM oversight as described in 
Secs. 831.911 and 842.808 of this chapter); or

[[Page 69175]]

    (ii) Is a special agent in the Diplomatic Security Service.
* * * * *
    Premium pay means the dollar value of earned hours of compensatory 
time off and additional pay authorized by subchapter V of chapter 55 of 
title 5, United States Code, and this subpart for overtime, night, 
Sunday, or holiday work; or for standby duty, administratively 
uncontrollable overtime work, or availability duty. This excludes 
overtime pay paid to employees under the Fair Labor Standards Act and 
compensatory time off earned in lieu of such overtime pay.
* * * * *


Sec. 550.107  [Amended]

    23. In Sec. 550.107, the introductory text is amended by removing 
``any period'' and adding in its place ``any pay period''.
    24. In Sec. 550.111, a new paragraph (i) is added to read as 
follows:


Sec. 550.111  Authorization of overtime pay.

* * * * *
    (i) An employee is not entitled to overtime pay under this subpart 
for time spent in training, except as provided in Sec. 410.402 of this 
chapter.
    25. In Sec. 550.112, paragraphs (k), (l), and (m) are added to read 
as follows:


Sec. 550.112  Computation of overtime work.

* * * * *
    (k) Standby duty. (1) An employee is on duty, and time spent on 
standby duty is hours of work if, for work-related reasons, the 
employee is restricted by official order to a designated post of duty 
and is assigned to be in a state of readiness to perform work with 
limitations on the employee's activities so substantial that the 
employee cannot use the time effectively for his or her own purposes. A 
finding that an employee's activities are substantially limited may not 
be based on the fact that an employee is subject to restrictions 
necessary to ensure that the employee will be able to perform his or 
her duties and responsibilities, such as restrictions on alcohol 
consumption or use of certain medications.
    (2) An employee is not considered restricted for ``work-related 
reasons'' if, for example, the employee remains at the post of duty 
voluntarily, or if the restriction is a natural result of geographic 
isolation or the fact that the employee resides on the agency's 
premises. For example, in the case of an employee assigned to work in a 
remote wildland area or on a ship, the fact that the employee has 
limited mobility when relieved from duty would not be a basis for 
finding that the employee is restricted for work-related reasons.
    (l) On-call status. An employee is off duty, and time spent in an 
on-call status is not hours of work if--
    (1) The employee is allowed to leave a telephone number or carry an 
electronic device for the purpose of being contacted, even though the 
employee is required to remain within a reasonable call-back radius; or
    (2) The employee is allowed to make arrangements for another person 
to perform any work that may arise during the on-call period.
    (m) Sleep and meal time. (1) Bona fide sleep and meal periods may 
not be considered hours of work, except as provided in paragraphs 
(m)(2), (m)(3), and (m)(4) of this section. If a sleep or meal period 
is interrupted by a call to duty, the time spent on duty is hours of 
work.
    (2) Sleep and meal periods during regularly scheduled tours of duty 
are hours of work for employees who receive annual premium pay for 
regularly scheduled standby duty under 5 U.S.C. 5545(c)(1).
    (3) When employees are assigned to work shifts of 24 hours or more 
during which they must remain within the confines of their duty station 
in a standby status, and for which they do not receive annual premium 
pay for regularly scheduled standby duty under 5 U.S.C. 5545(c)(1), the 
amount of bona fide sleep and meal time excluded from hours of work may 
not exceed 8 hours in any 24-hour period. No sleep time may be excluded 
unless the employee had the opportunity to have an uninterrupted period 
of at least 5 hours of sleep during the applicable sleep period. For 
work shifts of less than 24 hours, agencies may not exclude on-duty 
sleep periods from hours of work, but must exclude bona fide meal 
periods during which the employee is completely relieved from duty.
    (4) For firefighters compensated under 5 U.S.C. 5545b, on-duty 
sleep and meal time may not be excluded from hours of work.
    26. In Sec. 550.114, a new paragraph (e) is added to read as 
follows:


Sec. 550.114  Compensatory time off.

* * * * *
    (e) The dollar value of compensatory time off when it is 
liquidated, or for the purpose of applying pay limitations, is the 
amount of overtime pay the employee otherwise would have received for 
the hours of the pay period during which compensatory time off was 
earned by performing overtime work.
    27. In Sec. 550.121, a new paragraph (c) is added to read as 
follows:


Sec. 550.121  Authorization of night pay differential.

* * * * *
    (c) An employee is not entitled to night pay differential while 
engaged in training, except as provided in Sec. 410.402 of this 
chapter.
    28. In Sec. 550.131, a new paragraph (d) is added to read as 
follows:


Sec. 550.131  Authorization of pay for holiday work.

* * * * *
    (d) An employee is not entitled to holiday premium pay while 
engaged in training, except as provided in Sec. 410.402 of this 
chapter.


Sec. 550.153  [Amended]

    29. In Sec. 550.153, paragraph (d)(1) is amended by removing 
``Sec. 550.112(f)'' and adding in its place ``Sec. 550.112(h)''.
    30. In Sec. 550.162, a new paragraph (f) is added to read as 
follows:


Sec. 550.162  Payment provisions.

* * * * *
    (f) Unless an agency discontinues authorization of premium pay 
under Sec. 550.141 or Sec. 550.151 for all similar positions, it may 
not discontinue authorization of such premium pay for an individual 
employee's position--
    (1) During a period of paid leave elected by the employee and 
approved by the agency in lieu of benefits under the Federal Employees' 
Compensation Act, as amended (5 U.S.C. 8101 et seq.), following a job-
related injury;
    (2) During a period of continuation of pay under the Federal 
Employees' Compensation Act, as amended (5 U.S.C. 8101 et seq.);
    (3) During a period of leave without pay, if the employee is in 
receipt of benefits under the Federal Employees' Compensation Act, as 
amended (5 U.S.C. 8101 et seq.). (Note: No premium pay is payable 
during leave without pay; however, the continued authorization may 
prevent a reduction in an employee's retirement benefits if the leave 
without pay period occurs during the employee's high-3 average salary 
period.)
    31. In Sec. 550.171, the existing text is designated as paragraph 
(a), and a new paragraph (b) is added to read as follows:


Sec. 550.171  Authorization of pay for Sunday work.

* * * * *
    (b) An employee is not entitled to Sunday premium pay while engaged 
in training, except as provided in Sec. 410.402 of this chapter.

[[Page 69176]]

Subpart B--Advances in Pay

    32. The authority citation for subpart B of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5524a, 5545a(h)(2)(B); sections 302 and 404 
of the Federal Employees Pay Comparability Act of 1990 (Public Law 
101-509), 104 Stat. 1462 and 1466, respectively; E.O. 12748, 3 CFR, 
1992 Comp., p. 316.

    33. In Sec. 550.202, paragraph (c) of the definition of newly 
appointed is revised to read as follows:


Sec. 550.202  Definitions.

* * * * *
    Newly appointed * * *
    (c) A permanent appointment in the competitive service following 
termination of employment under the Student Educational Employment 
Program (as described in Sec. 213.3202 of this chapter), provided such 
employee--
    (1) Was separated from the service, in a nonpay status, or a 
combination of both during the entire 90-day period immediately before 
the permanent appointment; and
    (2) Has fully repaid any former advance in pay under Sec. 550.205.
* * * * *


Sec. 550.205  [Amended]

    34. In Sec. 550.205, paragraph (b) is amended by removing the word 
``recover'' and adding in its place the word ``recovery''.

Subpart C--Allotments and Assignments From Federal Employees

    35. The authority citation for subpart C of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5527, E.O. 10982, 3 CFR 1959-1963 Comp., p. 
502.


Sec. 550.311  [Amended]

    36. In Sec. 550.311, paragraph (b) is amended by removing 
``paragraph (b)'' and adding in its place ``paragraph (a)''.
    37. In Sec. 550.312, paragraphs (a), (c), (d), and (e) are revised 
to read as follows:


Sec. 550.312  General limitations.

    (a) The allotter must specifically designate the allottee and the 
amount of the allotment.
* * * * *
    (c) The allotter must personally authorize a change or cancellation 
of an allotment.
    (d) The agency has no liability in connection with any authorized 
allotment disbursed by the agency in accordance with the allotter's 
request.
    (e) Any disputes regarding any authorized allotment are a matter 
between the allotter and the allottee.
    38. Section 550.341 is revised to read as follows:


Sec. 550.341  Scope.

    An agency must permit an employee to make an allotment for 
charitable contributions to a Combined Federal Campaign in accordance 
with Sec. 950.901 of this chapter.


Sec. 550.342  [Removed]

    39. Section 550.342 is removed.

Subpart G--Severance Pay

    40. The authority citation for subpart G of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5595; E.O. 11257, 3 CFR, 1964-1965 Comp., p. 
357.

    41. In Sec. 550.703:
    A. The definition of involuntary separation is amended by removing 
the words ``the commuting area'' in both places and adding in each 
place the words ``his or her commuting area'';
    B. A new definition of employed by the Government of the United 
States is added in alphabetical order; the definitions of commuting 
area, employee, immediate annuity, and nonqualifying appointment are 
revised;
    C. Paragraph (g) of the definition of qualifying appointment is 
revised; and
    D. paragraph (c)(3) of the definition of reasonable offer is 
revised.
    The addition and revisions read as follows:


Sec. 550.703  Definitions.

* * * * *
    Commuting area means the geographic area surrounding a work site 
that encompasses the localities where people live and reasonably can be 
expected to travel back and forth daily to work, as established by the 
employing agency based on the generally held expectations of the local 
community. When an employee's residence is within the standard 
commuting area for a work site, the work site is within the employee's 
commuting area. When an employee's residence is outside the standard 
commuting area for a proposed new work site, the employee's commuting 
area is deemed to include the expanded area surrounding the employee's 
residence and including all destinations that can be reached via a 
commuting trip that is not significantly more burdensome than the 
current commuting trip. This excludes a commuting trip from a residence 
where the employee planned to stay only temporarily until he or she 
could find a more permanent residence closer to his or her work site. 
For this purpose, a commuting trip to a new work site is considered 
significantly more burdensome if it would compel the employee to change 
his or her place of residence in order to continue employment, taking 
into account commuting time and distance, availability of public 
transportation, cost, and any other relevant factors.
    Employed by the Government of the United States refers to 
employment by any part of the Government of the United States, 
including the United States Postal Service and similar independent 
entities, but excluding enlistment or activation in the armed forces 
(as defined in 5 U.S.C. 2101).
    Employee (for the purpose of establishing initial entitlement to 
severance pay upon separation) means an employee as defined in 5 U.S.C. 
5595(a)(2), excluding an individual employed by the government of the 
District of Columbia.

(Note to definition of ``employee'': The term ``individual 
employed'' in 5 U.S.C. 5595(a)(2)(A) refers to an ``employee'' as 
defined in 5 U.S.C. 2105.)

    Immediate annuity means--
    (a) A recurring benefit payable under a retirement system 
applicable to Federal civilian employees or members of the uniformed 
services that the individual is eligible to receive (disregarding any 
offset described in Sec. 550.704(b)(5)) at the time of the involuntary 
separation from civilian service or that begins to accrue within 1 
month after such separation, excluding any Social Security retirement 
benefit; or
    (b) A benefit that meets the conditions in paragraph (a) of this 
definition, except that the benefit begins to accrue more than 1 month 
after separation solely because the employee elected a later commencing 
date (such as allowed under Sec. 842.204 of this chapter).
* * * * *
    Nonqualifying appointment means an appointment that does not convey 
eligibility for severance pay under this subpart, including--
    (a) An appointment at a noncovered agency;
    (b) An appointment in which the employee has an intermittent work 
schedule;
    (c) A Presidential appointment;
    (d) An emergency appointment;
    (e) An excepted appointment under Schedule C; a noncareer 
appointment in the Senior Executive Service, as defined in 5 U.S.C. 
3132(a); or an equivalent appointment made for similar purposes; and

[[Page 69177]]

    (f) A time-limited appointment (except for a time-limited 
appointment that is qualifying because it is made effective within 3 
calendar days after separation from a qualifying appointment), 
including--
    (1) A term appointment;
    (2) A temporary appointment pending establishment of a register 
(TAPER);
    (3) An overseas limited appointment with a time limitation;
    (4) A limited term or limited emergency appointment in the Senior 
Executive Service, as defined in 5 U.S.C. 3132(a), or an equivalent 
appointment made for similar purposes;
    (5) A Veterans Readjustment Appointment under part 307 of this 
chapter; and
    (6) A Presidential Management Intern appointment under part 362 of 
this chapter.
    Qualifying appointment * * *
    (g) A time-limited appointment (including a series of time-limited 
appointments by the same agency without any intervening break in 
service) for full-time employment that takes effect within 3 calendar 
days after the end of one of the qualifying appointments listed in 
paragraphs (a) through (f) of this definition, provided the time-
limited appointment is not nonqualifying on grounds other than the 
time-limited nature of the appointment.
* * * * *
    Reasonable offer means * * *
    (c) * * *
    (3) Of equal or greater tenure and with the same work schedule 
(part-time or full-time); and
* * * * *
    42. In Sec. 550.706, paragraph (a) is revised and paragraph (c) is 
added to read as follows:


Sec. 550.706  Criteria for meeting the requirement for involuntary 
separation.

    (a) An employee who resigns because he or she expects to be 
involuntarily separated is considered to have been involuntarily 
separated if the employee resigns after receiving--
    (1) Specific written notice that he or she will be involuntarily 
separated by a particular action effective on a particular date; or
    (2) A general written notice of reduction in force or transfer of 
functions which--
    (i) Is issued by a properly authorized agency official;
    (ii) Announces that the agency has decided to abolish, or transfer 
to another commuting area, all positions in the competitive area (as 
defined in Sec. 351.402 of this chapter) by a particular date (no more 
than 1 year after the date of the notice); and
    (iii) States that, for all employees in that competitive area, a 
resignation following receipt of the notice constitutes an involuntary 
separation for severance pay purposes.
* * * * *
    (c) A resignation is not considered an involuntary separation if 
the specific or general written notice is canceled before the 
separation (based on that resignation) takes effect.
    43. In Sec. 550.707, the section heading is revised; paragraph (b) 
is revised; and a new paragraph (d) is added to read as follows:


Sec. 550.707  Computation of severance pay fund.

* * * * *
    (b) Basic severance pay allowance for employees with variable work 
schedules or rates of basic pay. In the following circumstances, the 
weekly rate of basic pay used in computing the basic severance pay 
allowance must be determined based on the weekly average for the last 
position held by the employee during the 26 biweekly pay periods 
immediately preceding separation, as follows:
    (1) For positions in which the number of hours in the employee's 
basic work schedule (excluding overtime hours) varies during the year 
because of part-time work requirements, compute the weekly average of 
those hours and multiply that average by the hourly rate of basic pay 
in effect at separation.
    (2) For positions in which the rate of annual premium pay for 
standby duty regularly varies throughout the year, compute the average 
standby duty premium pay percentage and multiply that percentage by the 
weekly rate of basic pay (as defined in Sec. 550.103) in effect at 
separation.
    (3) For prevailing rate positions in which the amount of night 
shift differential pay under 5 U.S.C. 5343(f) varies from week to week 
under a regularly recurring cycle of work schedules, determine for each 
week in the averaging period the value of night shift differential pay 
expressed as a percentage of each week's scheduled rate of pay (as 
defined in Sec. 532.401 of this chapter), compute the weekly average 
percentage, and multiply that percentage by the weekly scheduled rate 
of pay in effect at separation.
    (4) For positions with seasonal work requirements, compute the 
weekly average of hours in a pay status (excluding overtime hours) and 
multiply that average by the hourly rate of basic pay in effect at 
separation.
    (5) For positions held by firefighters compensated under subpart M 
of this part, where the firefighter has a recurring cycle of variable 
workweeks within his or her regular tour of duty (as defined in 
Sec. 550.1302), compute the weekly average of hours in the regular tour 
of duty and determine the weekly rate of basic pay based on the average 
workweek and the rate of basic pay in effect at separation.
* * * * *
    (d) Lifetime limitation. The severance pay fund is limited to that 
amount which would provide 52 weeks of severance pay (taking into 
account weeks of severance pay previously received, as provided in 
Sec. 550.712).
    44. In Sec. 550.708:
    A. Paragraph (a) is revised;
    B. Paragraph (c) is amended by removing the word ``and'' at the end 
of the paragraph;
    C. Paragraph (d) is amended by removing the period at the end of 
the paragraph and adding a semicolon and the word ``and'' in its place; 
and
    D. A new paragraph (e) is added.
    The revision and addition read as follows:


Sec. 550.708  Creditable service.

* * * * *
    (a) Civilian service as an employee (as defined in 5 U.S.C. 2105), 
excluding time during a period of nonpay status that is not creditable 
for annual leave accrual purposes under 5 U.S.C. 6303(a);
* * * * *
    (e) Service performed with the government of the District of 
Columbia by an individual first employed by that government before 
October 1, 1987, excluding service as a teacher or librarian of the 
public schools of the District of Columbia.
    45. Section 550.709 is revised to read as follows:


Sec. 550.709  Accrual and payment of severance pay.

    (a) Severance pay accrues on a day-to-day basis following the 
recipient's separation from Federal employment. If severance pay begins 
in the middle of a pay period, 1 day of severance pay accrues for each 
workday or applicable holiday left in the pay period at the same rate 
at which basic pay would have accrued if the recipient were still 
employed. Thereafter, accrual is based on days from Monday through 
Friday, with each day worth one-fifth of 1 week's severance pay. 
Accrual ceases when the severance pay entitlement is suspended or 
terminated, as provided in Secs. 550.710 and 550.711. If severance pay 
is suspended during a nonqualifying time-limited appointment as 
provided in Sec. 550.710, accrual will

[[Page 69178]]

resume following separation from that appointment.
    (b) Severance payments must be made at the same pay period 
intervals that salary payments would be made if the recipient were 
still employed. The amount of the severance payment is computed using 
the recipient's rate of basic pay in effect immediately before 
separation, with credit for each day of severance pay accrual during 
the pay period corresponding to the payment date. A severance payment 
is subject to appropriate deductions for income and Social Security 
taxes. Severance payments are the responsibility of the agency 
employing the recipient at the time of the involuntary separation that 
triggered the current entitlement to severance pay.
    (c) When an individual receives severance pay as the result of an 
involuntary separation from a qualifying time-limited appointment, the 
severance payment is based on the rate of basic pay received at the 
time of that separation. Severance payments are the responsibility of 
the agency that employed the individual under the qualifying time-
limited appointment.
    (d) When an individual is in a nonpay status immediately before 
separation, the amount of the severance payment is determined using the 
basic pay that he or she would have received if he or she had been in a 
pay status at the time of separation.
    (e) When an individual's severance pay fund is computed under 
Sec. 550.707(b) using an average rate of basic pay, that average rate 
is used to determine the amount of the severance payment. Exception: In 
the case of a seasonal employee, the agency may choose instead to use 
the employee's rate of basic pay at separation (as computed based on 
the employee's work schedule during the established seasonal work 
period) and then authorize severance payments only during that seasonal 
work period.
    (f) In the case of individuals who become employed by a 
nonappropriated fund instrumentality of the Department of Defense or 
the Coast Guard under the conditions described in 5 U.S.C. 5595(h)(4), 
payment of severance pay may be suspended consistent with the rules in 
5 U.S.C. 5595(h) and any supplemental regulations issued by the 
Department of Defense.
    (g) Notwithstanding paragraph (b) of this section, an agency may 
pay severance pay in a single lump sum if expressly authorized by law.
    46. Section 550.710 is revised to read as follows:


Sec. 550.710  Suspension of severance pay.

    When an individual entitled to severance pay is employed by the 
Government of the United States or the government of the District of 
Columbia under a nonqualifying time-limited appointment, severance pay 
must be suspended during the life of the appointment. Severance pay 
resumes, without any recomputation, when the employee separates from 
the nonqualifying time-limited appointment. The resumed severance 
payments are the responsibility of the agency that originally triggered 
the individual's severance pay entitlement by separating the individual 
while he or she was serving under a qualifying appointment.
    47. Section 550.711 is revised to read as follows:


Sec. 550.711  Termination of severance pay entitlement.

    Entitlement to severance pay ends when--
    (a) The individual entitled to severance pay is employed by the 
Government of the United States or the government of the District of 
Columbia, unless employed under a nonqualifying time-limited 
appointment as described in Sec. 550.710; or
    (b) The severance pay fund is exhausted.


Sec. 550.713  [Amended]

    48. Section 550.713 is amended by removing the second sentence.

Subpart H--Back Pay

    49. The authority citation for subpart H of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5596(c); Pub. L. 100-202, 101 Stat. 1329.

    50. In Sec. 550.803, the definitions of employee and pay, 
allowances, and differentials are revised to read as follows:


Sec. 550.803  Definitions.

* * * * *
    Employee means an employee of an agency. When the term employee is 
used to describe an individual who is making a back pay claim, it also 
may mean a former employee.
* * * * *
    Pay, allowances, and differentials means pay, leave, and other 
monetary employment benefits to which an employee is entitled by 
statute or regulation and which are payable by the employing agency to 
an employee during periods of Federal employment. Agency and employee 
contributions to a retirement investment fund, such as the Thrift 
Savings Plan, are not covered. Monetary benefits payable to separated 
or retired employees based upon a separation from service, such as 
retirement benefits, severance payments, and lump-sum payments for 
annual leave, are not covered.
* * * * *
    51. In Sec. 550.805, paragraph (e) is revised and a new paragraph 
(h) is added to read as follows:


Sec. 550.805  Back pay computations.

* * * * *
    (e) In computing the net amount of back pay payable under section 
5596 of title 5, United States Code, and this subpart, an agency must 
make the following offsets and deductions (in the order shown) from the 
gross back pay award:
    (1) Any outside earnings (gross earnings less any associated 
business losses and ordinary and necessary business expenses) received 
by an employee for other employment (including a business enterprise) 
undertaken to replace the employment from which the employee was 
separated by the unjustified or unwarranted personnel action during the 
interim period covered by the corrective action. Do not count earnings 
from additional or ``moonlight'' employment the employee may have 
engaged in while Federally employed (before separation) and while 
erroneously separated.
    (2) Any erroneous payments received from the Government as a result 
of the unjustified or unwarranted personnel action, which, in the case 
of erroneous payments received from a Federal employee retirement 
system, must be returned to the appropriate system. Such payments must 
be recovered from the back pay award in the following order:
    (i) Retirement annuity payments (i.e., gross annuity less 
deductions for life insurance and health benefits premiums, if those 
premiums can be recovered by the affected retirement system from the 
insurance carrier);
    (ii) Refunds of retirement contributions (i.e., gross refund before 
any deductions);
    (iii) Severance pay (i.e., gross payments before any deductions); 
and
    (iv) A lump-sum payment for annual leave (i.e., gross payment 
before any deductions).
    (3) Authorized deductions of the type that would have been made 
from the employee's pay (if paid when properly due) in accordance with 
the normal order of precedence for deductions from pay established by 
the agency, subject to any applicable law or regulation, including, but 
not limited to, the

[[Page 69179]]

following types of deductions, as applicable:
    (i) Mandatory employee retirement contributions toward a defined 
benefit plan, such as the Civil Service Retirement System or the 
defined benefit component of the Federal Employees Retirement System;
    (ii) Social Security taxes and Medicare taxes;
    (iii) Health benefits premiums, if coverage continued during a 
period of erroneous retirement (with paid premiums recoverable by the 
retirement system) or is retroactively reinstated at the employee's 
election under 5 U.S.C. 8908(a);
    (iv) Life insurance premiums if--
    (A) Coverage continued during a period of erroneous retirement;
    (B) Coverage was stopped during an erroneous suspension or 
separation and the employee suffered death or accidental dismemberment 
during that period (consistent with 5 U.S.C. 8706(d)); or
    (C) Additional premiums are owed because of a retroactive increase 
in basic pay; and
    (v) Federal income tax withholdings.

    (Note to paragraph (e)(3): See appendix A to this subpart for 
additional information on computing certain deductions.)

    (4) Administrative offsets under 31 U.S.C. 3716 to recover any 
other outstanding debt(s) owed to the Federal Government by the 
employee, as appropriate.
* * * * *
    (h) Agencies must correct errors that affect an employee's Thrift 
Savings Plan account consistent with regulations prescribed by the 
Federal Retirement Thrift Investment Board. (See parts 1605 and 1606 of 
this title.)
    52. In Sec. 550.806, paragraph (h) is removed, and paragraph (a) is 
amended by redesignating paragraph (a) as paragraph (a)(1) and adding a 
new paragraph (a)(2) to read as follows:


Sec. 550.806  Interest computations.

    (a) * * *
    (2) Interest accrual ends at a time selected by the agency that is 
no more than 30 days before the date of the back pay interest payment. 
No interest is payable if a complete back pay payment is made within 30 
days after any erroneous withdrawal, reduction, or denial of a payment, 
and the interest accrual ending date is set to coincide with the 
interest accrual starting date.
* * * * *
    53. A new appendix A is added to subpart H of part 550 to read as 
follows:

Appendix A to Subpart H of Part 550--Information on Computing 
Certain Common Deductions From Back Pay Awards

    To determine the net back payment owed an employee, an agency 
must make certain required deductions. (See Sec. 550.805(e)(3).) To 
compute these deductions, an agency must determine the appropriate 
base or follow other rules, consistent with applicable law. Some 
deductions, such as tax deductions, are not subject to OPM 
regulation. To assist agencies, this appendix summarizes the rules 
for certain common deductions. For further information on Federal 
tax deductions from back pay awards, please contact the Internal 
Revenue Service directly or review relevant IRS publications.

----------------------------------------------------------------------------------------------------------------
                            Type of deduction                                   How to Compute the deduction
----------------------------------------------------------------------------------------------------------------
(a) Mandatory employee retirement contributions..........................  Compute the deduction based on the
                                                                            basic pay portion of gross back pay
                                                                            before adding interest or applying
                                                                            any offset or deduction.
(b) Life insurance premiums..............................................  Compute the deduction based on the
                                                                            basic pay portion of gross back pay
                                                                            before adding interest or applying
                                                                            any offset or deduction.
(c) Social Security (OASDI) and Medicare taxes...........................  Compute the deduction based on
                                                                            adjusted gross back pay (gross back
                                                                            pay less the offset for outside
                                                                            earnings under Sec.  550.805(e)(1),
                                                                            but before adding interest). The
                                                                            deduction may be reduced dollar-for-
                                                                            dollar by the amount of any Social
                                                                            Security or Medicare taxes that were
                                                                            withheld from erroneous payments
                                                                            made in the same calendar year as
                                                                            the back pay award, but only if--
                                                                              (1) Those erroneous payments were
                                                                               actually recovered by the
                                                                               Government by offsetting the back
                                                                               pay award as provided in Sec.
                                                                               550.805(e)(2); and
                                                                              (2) Those withheld taxes have not
                                                                               already been repaid to the
                                                                               employee.
                                                                           Note: Social Security taxes are
                                                                            subject to the applicable Social
                                                                            Security tax wage base limit. In
                                                                            addition, see IRS guidance regarding
                                                                            possible correction and refunding of
                                                                            Social Security and Medicare taxes
                                                                            withheld from erroneous payments in
                                                                            a prior calendar year.
(d) Federal income tax withholdings......................................  Compute the deduction based on
                                                                            adjusted gross back pay (gross back
                                                                            pay less the offset for outside
                                                                            earnings under Sec.  550.805(e)(1),
                                                                            but before adding interest) less any
                                                                            part of back pay not subject to
                                                                            income tax deductions, such as
                                                                            nonforeign area cost-of-living
                                                                            allowances and contributions to the
                                                                            Thrift Savings Plan that are
                                                                            deducted from the pay of the
                                                                            employee. The deduction may be
                                                                            reduced dollar-for-dollar by the
                                                                            amount of any Federal income taxes
                                                                            withheld from erroneous payments
                                                                            made in the same calendar year as
                                                                            the back pay award, but only if--
                                                                              (1) Those erroneous payments were
                                                                               actually recovered by the
                                                                               Government by offsetting the back
                                                                               pay award as provided in Sec.
                                                                               550.805(e)(2); and
                                                                              (2) Those withheld taxes have not
                                                                               already been repaid to the
                                                                               employee.
                                                                           Note: Additional Federal income tax
                                                                            withholdings from the interest
                                                                            portion of the back pay award may be
                                                                            required by the Internal Revenue
                                                                            Service in certain specific
                                                                            circumstances.
----------------------------------------------------------------------------------------------------------------

Subpart I--Pay for Duty Involving Physical Hardship or Hazard

    54. The authority citation for subpart I of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5545(d), 5548(b).

    55. In Sec. 550.902, the definition of employee is revised to read 
as follows:


Sec. 550.902  Definitions.

* * * * *
    Employee means an employee covered by the General Schedule (i.e., 
covered by chapter 51 and subchapter III of chapter 53 of title 5, 
United States Code).
* * * * *
    56. In Sec. 550.903, the introductory text of paragraph (b) is 
revised to read as follows:


Sec. 550.903  Establishment of hazard pay differentials.

* * * * *
    (b) Amendments to appendix A of this subpart may be made by OPM on 
its own motion or at the request of the head of an agency (or 
authorized designee).

[[Page 69180]]

The head of an agency (or authorized designee) may recommend the rate 
of hazard pay differential to be established and must submit, with its 
request for an amendment, information about the hazardous duty or duty 
involving physical hardship showing--
* * * * *
    57. Section 550.905 is revised to read as follows:


Sec. 550.905  Payment of hazard pay differential.

    (a) When an employee performs duty for which a hazard pay 
differential is authorized, the agency must pay the hazard pay 
differential for the hours in a pay status on the day (a calendar day 
or a 24-hour period, when designated by the agency) on which the duty 
is performed, except as provided in paragraph (b) of this section. 
Hours in a pay status for work performed during a continuous period 
extending over 2 days must be considered to have been performed on the 
day on which the work began, and the allowable differential must be 
charged to that day.
    (b) Employees may not be paid a hazardous duty differential for 
hours for which they receive annual premium pay for regularly scheduled 
standby duty under Sec. 550.141, annual premium pay for 
administratively uncontrollable overtime work under Sec. 550.151, or 
availability pay for criminal investigators under Sec. 550.181.

Subpart K--Collection of Offset From Indebted Government Employees

    58. The authority citation for subpart K of part 550 continues to 
read as follows:

    Authority: 5 U.S.C. 5514; sec. 8(1) of E.O. 11609; redesignated 
in sec. 2-1 of E.O. 12107.


Sec. 550.1104  [Amended]

    59. In Sec. 550.1104, paragraph (c)(2) is amended by adding 
``contesting'' after ``point of contact for'', and paragraph (d)(2) is 
amended by removing ``accont'' and adding ``account'' in its place.

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

    60. 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 D--Hours of Work


Sec. 551.401  [Amended]

    61. In Sec. 551.401, paragraphs (f) and (g) are amended by removing 
``Sec. 410.602'' and adding in its place ``Sec. 410.402'.
    62. In Sec. 551.423, paragraph (a)(3) is amended by removing the 
period at the end of the paragraph and adding in its place '', except 
as provided by Sec. 410.402(b) of this chapter and paragraphs (f) and 
(g) of Sec. 551.401.'' and paragraph (b)(1) is revised to read as 
follows:


Sec. 551.423  Time spent in training or attending a lecture, meeting, 
or conference.

* * * * *
    (b) * * *
    (1) Directed to participate means that the training is required by 
the agency and the employee's performance or continued retention in his 
or her current position will be adversely affected by nonenrollment in 
such training. The fact that an agency pays for all or part of the 
expenses of training does not create an entitlement to overtime hours 
of work unless participation in the training is directed by the agency.
* * * * *
    63. In Sec. 551.431, paragraph (a) is revised to read as follows:


Sec. 551.431  Time spent on standby duty or in an on-call status.

    (a)(1) An employee is on duty, and time spent on standby duty is 
hours of work if, for work-related reasons, the employee is restricted 
by official order to a designated post of duty and is assigned to be in 
a state of readiness to perform work with limitations on the employee's 
activities so substantial that the employee cannot use the time 
effectively for his or her own purposes. A finding that an employee's 
activities are substantially limited may not be based on the fact that 
an employee is subject to restrictions necessary to ensure that the 
employee will be able to perform his or her duties and 
responsibilities, such as restrictions on alcohol consumption or use of 
certain medications.
    (2) An employee is not considered restricted for ``work-related 
reasons'' if, for example, the employee remains at the post of duty 
voluntarily, or if the restriction is a natural result of geographic 
isolation or the fact that the employee resides on the agency's 
premises. For example, in the case of an employee assigned to work in a 
remote wildland area or on a ship, the fact that the employee has 
limited mobility when relieved from duty would not be a basis for 
finding that the employee is restricted for work-related reasons.
* * * * *
    64. In Sec. 551.432:
    A. Paragraph (a)(1) is amended by removing ``tour of duty'' and 
adding ``work shift'' in its place;
    B. Paragraphs (b) and (c) are revised; and
    C. New paragraphs (e) and (f) are added.
    The revisions and additions read as follows:


Sec. 551.432  Sleep time.

* * * * *
    (b) For employees engaged in law enforcement or fire protection 
activities who receive annual premium pay under 5 U.S.C. 5545(c)(1) or 
(2), the requirements of paragraph (a) of this section apply, except 
that on-duty sleep time may be excluded from hours of work only if the 
work shift is more than 24 hours.
    (c) The total amount of bona fide sleep and meal time that may be 
excluded from hours of work may not exceed 8 hours in a 24-hour period.
* * * * *
    (e) On-duty sleep and meal time during regularly scheduled hours 
for which standby duty premium pay under 5 U.S.C. 5545(c)(1) is payable 
may not be excluded from hours of work.
    (f) For firefighters compensated under 5 U.S.C. 5545b, on-duty 
sleep and meal time may not be excluded from hours of work.

Subpart E--Overtime Pay Provisions

    65. In Sec. 551.501, paragraph (a)(2) is amended by removing 
``Sec. 410.602'' and adding in its place ``Sec. 410.402'', and 
paragraph (a)(5) is revised to read as follows:


Sec. 551.501  Overtime pay.

    (a) * * *
    (5) On the basis of hours of work in excess of 40 hours in a 
workweek for an employee engaged in fire protection or law enforcement 
activities when the employee is receiving compensation under 5 U.S.C. 
5545(c)(1) or (2) or 5545b, or is not an employee (as defined in 5 
U.S.C. 5541(2)) for the purposes of 5 U.S.C. 5542, 5543, and 5544;
* * * * *


Sec. 551.511  [Amended]

    66. In Sec. 551.511, paragraph (b)(3) is amended by removing 
``(e.g., incentive awards for outstandingly high-quality work)'' and 
adding in its place ``(i.e., discretionary cash awards or bonuses)''.

[[Page 69181]]

Sec. 551.512  [Amended]

    67. In Sec. 551.512, paragraph (b) is amended by removing 
``(exclusive of any premiums or differentials)'' and adding in its 
place ``(exclusive of any premiums, differentials, or cash awards or 
bonuses)''.
    68. A new Sec. 551.514 is added to read as follows:


Sec. 551.514  Nondiscretionary bonuses.

    (a) When an employee earns a nondiscretionary cash award or bonus 
(as opposed to discretionary cash awards or bonuses as described in 
Sec. 551.511(b)(3)), the bonus must be taken into account in 
determining overtime pay for the period of time during which the bonus 
was earned. An agency may meet the overtime pay requirements for the 
bonus period by using one of the procedures described in paragraphs (b) 
and (c) of this section. The procedures in paragraphs (b)(1) and (b)(2) 
of this section calculate the additional overtime pay the employee is 
due. The procedures in paragraphs (b)(3), (c)(2), and (c)(3) of this 
section describe methods where the overtime pay requirements are met in 
the calculation or distribution of the bonus itself.
    (b) Individual computation methods. (1) Week-by-week recomputation 
method. The agency may compute the additional overtime pay owed an 
employee by allocating the nondiscretionary bonus payable under the 
agency bonus plan to the weeks or hours during which it was earned and 
recomputing the employee's total remuneration, hourly regular rate, and 
overtime pay for each applicable workweek in the bonus period.
    (2) Bonus hourly rate method. The agency may assume that an equal 
amount of the nondiscretionary bonus applies to each hour worked during 
the bonus period and derive a bonus hourly rate by dividing the 
employee's total bonus by the total number of hours worked by the 
employee during the bonus period. Then the agency may compute the 
employee's additional overtime pay by multiplying one-half of that 
bonus hourly rate by the total number of overtime hours worked by the 
employee during the bonus period.
    (3) Percentage bonus method. An agency may establish a 
nondiscretionary bonus as a fixed percentage of total pay (i.e., pre-
bonus total remuneration, including straight time pay for any overtime 
hours, plus any half-rate overtime pay under Sec. 551.512(a)(2)) to be 
earned by the employee during a future period of service. This method 
may not be used to circumvent any bonus limitations that might 
otherwise apply. At the agency's discretion, the portion of the bonus 
attributable to the employee's half-rate overtime pay under 
Sec. 551.512(a)(2) may be excluded in applying bonus limitations, since 
it can be viewed as constituting additional FLSA overtime pay. (This 
method does not apply to nondiscretionary bonuses established as a 
percentage of a segment of pay, such as ratings-based cash awards under 
Sec. 451.104(g) of this chapter that are expressed as a percentage of 
basic pay, excluding locality adjustments. To meet overtime pay 
requirements for these types of bonuses, use one of the methods 
described in paragraphs (b)(1) or (b)(2) of this section.)
    (c) Group-based bonus distribution methods. (1) For employees who 
have earned nondiscretionary group cash awards or bonuses, payment of a 
bonus under one of the methods of distribution described in paragraphs 
(c)(2) and (c)(3) of this section is considered to be in full 
compliance with the overtime pay requirements of this subpart. These 
methods may not be used to circumvent any bonus limitations that might 
otherwise apply.
    (2) Percentage method. (i) Identify the amount of the group bonus 
under the agency's bonus plan and the period of time during which it 
was earned;
    (ii) Establish the group bonus as a percentage of the total pay 
(i.e., total remuneration before considering the group bonus, including 
straight time pay for any overtime hours, plus any half-rate overtime 
pay under Sec. 551.512(a)(2)) earned by employees in the group during 
the bonus period; and (iii) Multiply the percentage in paragraph 
(c)(2)(ii) of this section times each individual employee's total pay 
earned during the bonus period to determine each employee's share of 
the group bonus.
    (3) Boosted hour method. (i) Identify the amount of the group bonus 
under the agency's bonus plan and the period of time during which it 
was earned;
    (ii) Determine the total number of boosted hours for all employees 
under the group bonus plan by adding up the total number of hours of 
work by those employees (nonovertime and overtime hours) and increasing 
that sum by one-half of the total number of overtime hours;
    (iii) Divide the amount of the group bonus by the total number of 
boosted hours for all employees under the group bonus plan to determine 
the amount of the bonus allocable to each hour; and (iv) Multiply this 
hourly bonus amount by the number of boosted hours credited to each 
individual employee in the bonus period to determine each employee's 
share of the group bonus.
    69. In Sec. 551.531, a new paragraph (e) is added to read as 
follows:


Sec. 551.531  Compensatory time off.

* * * * *
    (e) The dollar value of compensatory time off when it is 
liquidated, or for the purpose of applying pay limitations, is the 
amount of overtime pay the employee otherwise would have received for 
the hours of the pay period during which compensatory time off was 
earned by performing overtime work.


Sec. 551.541  [Amended]

    70. In Sec. 551.541, paragraph (b) is amended by removing 
``511.411(c)'' and adding in its place ``551.411(c)''.

PART 575--RECRUITMENT AND RELOCATION BONUSES; RETENTION ALLOWANCES; 
SUPERVISORY DIFFERENTIALS

    71. The authority citation for part 575 is revised to read as 
follows:

    Authority: 5 U.S.C. 1104(a)(2), 5753, 5754, and 5755; secs. 302 
and 404 of the Federal Employees Pay Comparability Act of 1990 
(FEPCA) (Pub. L. 101-509), 104 Stat. 1462 and 1466, respectively; 
E.O. 12748, 3 CFR, 1992 Comp., p. 316.

Subpart A--Recruitment Bonuses

    72. In Sec. 575.102, paragraph (a)(3) is revised to read as 
follows:


Sec. 575.102  Delegation of authority.

    (a) * * *
    (3) A Senior Executive Service position paid under 5 U.S.C. 5383 or 
a Federal Bureau of Investigation and Drug Enforcement Administration 
Senior Executive Service position paid under 5 U.S.C. 3151;
* * * * *
    73. In Sec. 575.103, the definition of involuntary separated is 
amended by removing the words ``the commuting area'' wherever they 
appear and adding in their place the words ``his or her commuting 
area''; the definition of service agreement is amended by removing the 
words ``of a minimum of 12 months''; and the definition of commuting 
area is revised to read as follows:


Sec. 575.103  Definitions.

* * * * *
    Commuting area has the meaning given that term in Sec. 575.203.
* * * * *

Subpart B--Relocation Bonuses

    74. In Sec. 575.202, paragraph (a)(3) is revised to read as 
follows:

[[Page 69182]]

Sec. 575.202  Delegation of authority.

    (a) * * *
    (3) A Senior Executive Service position paid under 5 U.S.C. 5383 or 
a Federal Bureau of Investigation and Drug Enforcement Administration 
Senior Executive Service position paid under 5 U.S.C. 3151;
* * * * *
    75. In Sec. 575.203, the definition of involuntary separated is 
amended by removing the words ``the commuting area'' wherever they 
appear and adding in their place the words ``his or her commuting 
area''; and the definitions of commuting area and employee are revised 
to read as follows:


Sec. 575.203  Definitions.

* * * * *
    Commuting area means the geographic area surrounding a work site 
that encompasses the localities where people live and reasonably can be 
expected to travel back and forth daily to work, as established by the 
employing agency based on the generally held expectations of the local 
community. When an employee's residence is within the standard 
commuting area for a work site, the work site is within the employee's 
commuting area. When an employee's residence is outside the standard 
commuting area for a proposed new work site, the employee's commuting 
area is deemed to include the expanded area surrounding the employee's 
residence and including all destinations that can be reached via a 
commuting trip that is not significantly more burdensome than the 
current commuting trip. This excludes a commuting trip from a residence 
where the employee planned to stay only temporarily until he or she 
could find a more permanent residence closer to his or her work site. 
For this purpose, a commuting trip to a new work site is considered 
significantly more burdensome if it would compel the employee to change 
his or her place of residence in order to continue employment, taking 
into account commuting time and distance, availability of public 
transportation, cost, and any other relevant factors.
    Employee means--
    (a) An individual in the civil service (as defined in 5 U.S.C. 
2101) who is relocated without a break in service upon appointment to a 
position in or under an agency in a different commuting area; or
    (b) An employee in or under an agency whose duty station is changed 
permanently or temporarily to a different commuting area.
* * * * *


Sec. 575.205  [Amended]

    76. In Sec. 575.205, paragraph (b)(5) is amended by adding a 
parenthesis after the word ``Code''.

Subpart C--Retention Allowances

    77. In Sec. 575.302, paragraph (a)(3) is revised to read as 
follows:


Sec. 575.302  Delegation of authority.

    (a) * * *
    (3) A Senior Executive Service position paid under 5 U.S.C. 5383 or 
a Federal Bureau of Investigation and Drug Enforcement Administration 
Senior Executive Service position paid under 5 U.S.C. 3151;
* * * * *
    78. In Sec. 575.307, paragraph (a) is revised to read as follows:


Sec. 575.307  Reduction or termination of retention allowances.

    (a) The agency must reduce or terminate the authorized amount of a 
retention allowance to the extent necessary to ensure that the 
employee's estimated aggregate compensation, as defined in Sec. 530.202 
of this chapter, does not exceed the rate for level I of the Executive 
Schedule at the end of the calendar year.
* * * * *

PART 591--ALLOWANCES AND DIFFERENTIALS

Subpart B--Cost-of-Living Allowance and Post Differential--
Nonforeign Areas

    79. The authority citation for subpart B of part 591 continues to 
read as follows:

    Authority: 5 U.S.C. 5941; E.O. 10000, 3 CFR, 1943-1948 Comp., p. 
792; and E.O. 12510, 3 CFR, 1985 Comp., 338.

    80. In Sec. 591.201, the definition of official duty station is 
revised to read as follows:


Sec. 591.201  Definitions.

* * * * *
    Official duty station means the duty station for an employee's 
position of record as indicated on his or her most recent notification 
of personnel action, excluding a new duty station for an assignment 
that is followed immediately (i.e., within 3 workdays) by a reduction 
in force resulting in the employee's separation before he or she is 
required to report for duty at the new location. For an employee who is 
authorized to receive relocation allowances under 5 U.S.C. 5737 in 
connection with an extended assignment, the temporary duty station 
associated with that assignment is the employee's official duty 
station.
* * * * *

PART 610--HOURS OF DUTY

Subpart A--Weekly and Daily Scheduling of Work

    81. The authority citation for subpart A of part 610 is revised to 
read as follows:

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

    82. In Sec. 610.102, the definition of administrative workweek is 
revised to read as follows:


Sec. 610.102  Definitions.

* * * * *
    Administrative workweek means any period of 7 consecutive 24-hour 
periods designated in advance by the head of the agency under section 
6101 of title 5, United States Code.
* * * * *


Sec. 610.111  [Amended]

    83. Section 610.111 is amended by removing the word ``regulation'' 
in the introductory text of paragraph (a) and adding the words ``a 
written agency policy statement'' in its place, by removing the word 
``regulation'' in paragraphs (a)(1) and (a)(2) and adding in each place 
the words ``written agency policy statement'', and by removing the 
words ``regulation of the agency'' in paragraph (c)(2) and adding the 
words ``a written agency policy statement''.

Subpart D--Flexible and Compressed Work Schedules

    84. The authority citation for subpart D of part 610 continues to 
read as follows:

    Authority: 5 U.S.C. 6133(a).

    85. In Sec. 610.407, the existing text is designated as paragraph 
(a), and a new paragraph (b) is added to read as follows:


Sec. 610.407  Premium pay for holiday work for employees on compressed 
work schedules.

* * * * *
    (b) An employee on a compressed work schedule is not entitled to 
holiday premium pay while engaged in training, except as provided in 
Sec. 410.402 of this chapter.

[FR Doc. 99-31867 Filed 12-9-99; 8:45 am]
BILLING CODE 6325-01-P