[Federal Register Volume 66, Number 238 (Tuesday, December 11, 2001)]
[Rules and Regulations]
[Pages 63906-63909]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 01-30530]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 534, 591, and 930

RIN 3206-AJ44


Pay for Administrative Appeals Judge Positions

AGENCY: Office of Personnel Management.

[[Page 63907]]


ACTION: Interim rule with request for comments.

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SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations to implement a new pay system for administrative appeals 
judge positions. The administrative appeals judge pay system was 
recently authorized to cover positions which are not classifiable above 
GS-15 and for which the duties primarily involve reviewing decisions of 
administrative law judges. OPM is issuing interim regulations to ensure 
that agencies administer the new administrative appeals judge pay 
system in a consistent and equitable manner. These interim regulations 
also implement changes in law regarding the manner in which the 
administrative law judge basic pay schedule is adjusted.

DATES: Effective Date: The regulations are effective on December 11, 
2001.
    Applicability Date: The regulations apply on the first day of the 
first applicable pay period beginning on or after December 11, 2001.
    Comments Date: Comments must be received on or before February 11, 
2002.

ADDRESSES: Comments may be sent or delivered to Donald J. Winstead, 
Assistant Director for Compensation Administration, Workforce 
Compensation and Performance Service, Office of Personnel Management, 
Room 7H31, 1900 E Street NW., Washington, DC 20415, FAX: (202) 606-
0824, or email: [email protected].

FOR FURTHER INFORMATION CONTACT: Jeanne Jacobson, (202) 606-2858; FAX: 
(202) 606-0824; or email: [email protected].

SUPPLEMENTARY INFORMATION:
    Section 645 of the Treasury and General Government Appropriations 
Act, 2001, as incorporated in Public Law 106-544 by section 101(a)(3) 
of that Public Law, established a new pay system for administrative 
appeals judge (AAJ) positions effective on the first day of the first 
pay period beginning on or after April 20, 2001. The AAJ pay system is 
authorized under a new section 5372b of title 5, United States Code. 
New section 5372b authorizes the heads of Executive agencies (not 
including the U.S. General Accounting Office) to fix the rates of basic 
pay for AAJ positions. Section 5372b authorizes the Office of Personnel 
Management (OPM) to issue regulations under which the head of an 
Executive agency must fix the rate of basic pay for each AAJ position. 
The new regulations will appear in a new subpart F of part 534 of title 
5, Code of Federal Regulations.

Coverage

    Section 5372b of title 5, United States Code, defines an 
``administrative appeals judge position'' as a position not 
classifiable above GS-15, the duties of which primarily involve 
reviewing decisions of administrative law judges (ALJs) appointed under 
5 U.S.C. 3105. Section 534.601 of these interim regulations restates 
this statutory definition and clarifies that employees in AAJ positions 
review ALJ decisions and render final administrative decisions.
    Section 534.601 of the interim regulations also provides that the 
AAJ pay system does not cover employees already excluded from the 
General Schedule (GS) classification system established under 5 U.S.C. 
chapter 51. Members of the Senior Executive Service (SES), employees in 
senior-level (SL) and scientific or professional positions, ALJs, and 
employees in positions whose pay is fixed by administrative action and 
limited to level IV of the Executive Schedule also are excluded from 
the AAJ pay system.

Pay Structure

    Under 5 U.S.C. 5372b, the head of an Executive agency may set the 
rate of basic pay for employees in AAJ positions at a rate not less 
than the minimum rate of basic pay for level AL-3 and not more than the 
maximum rate of basic pay for level AL-3 of the ALJ pay system under 5 
U.S.C. 5372. To be consistent with the law, Sec. 534.603 of these 
interim regulations links the structure of the AAJ pay system directly 
to the structure of level AL-3 of the ALJ pay system. Since employees 
in AAJ positions review the decisions made by ALJs, linking to the ALJ 
basic pay structure also will help to ensure that employees in both pay 
systems are paid equitably.
    Section 534.603 of the interim regulations establishes six rates of 
basic pay for the AAJ pay system--AA-1, 2, 3, 4, 5, and 6. These rates 
correspond to the rates of basic pay for AL-3/A, B, C, D, E, and F of 
the ALJ pay system under 5 U.S.C. 5372, as shown in the following 
table:

------------------------------------------------------------------------
                                                               Rate of
           AAJ pay level                  ALJ pay level       basic pay
                                                               in 2001
------------------------------------------------------------------------
AA-1...............................  AL-3/A................      $82,100
AA-2...............................  AL-3/B................      $88,300
AA-3...............................  AL-3/C................      $94,700
AA-4...............................  AL-3/D................     $101,000
AA-5...............................  AL-3/E................     $107,300
AA-6...............................  AL-3/F................     $113,600
------------------------------------------------------------------------

    The interim regulations provide that each of the rates of basic pay 
of the AAJ pay system will be adjusted at the same time and in the same 
manner as the corresponding rates of basic pay of the ALJ pay system 
are adjusted under 5 U.S.C. 5372.

Pay Administration

    Section 534.604 of these interim regulations provides the basic pay 
administration rules for the AAJ pay system. These provisions are 
consistent with the ALJ pay administration rules found in 5 U.S.C. 5372 
and 5 CFR part 930, subpart B. Section 534.601(a) provides the head of 
each agency with authority to fix the rate of basic pay for each AAJ 
position within the agency. Section 534.604(b) requires the head of 
each agency to set the pay of an employee initially appointed to the 
AAJ pay system at rate AA-1, except as described below.
    The regulations provide the following three exceptions for setting 
pay above rate AA-1, up to the maximum rate AA-6:
    1. The regulations require agencies to set the pay of an employee 
under the GS pay system, who is appointed to an AAJ position without a 
break in service, at the lowest rate of basic pay of the AAJ pay system 
that equals or exceeds the employee's GS rate of basic pay immediately 
before the appointment. If the resulting basic pay increase is less 
than one-half of the dollar value of the employee's next within-grade 
increase, agencies must set the employee's rate of basic pay at the 
next higher rate of basic pay in the AAJ rate range.
    2. The regulations provide agencies with discretion to set pay at a 
higher rate based on a rate of basic pay the applicant received in a 
prior Federal position.
    3. The regulations provide agencies with discretion to set the rate 
of basic pay of an applicant who is not a current Federal employee at a 
higher rate based on the superior qualifications of the applicant.
    Section 534.604(c) of the interim regulations provides that 
employees in AAJ positions will advance successively to rates AA-2, 3, 
and 4 upon completion of 52 weeks of service in the next lower rate, 
and to rates 5 and 6 upon completion of 104 weeks of service in the 
next lower rate. Service time under a pay system outside the AAJ pay 
system does not count toward the required period of service, except for 
service under the ALJ pay system established under 5 U.S.C. 5372 when 
an employee moves from an ALJ position to an AAJ position without a 
break in service.
    Section 534.604(d) provides procedures for converting the AAJ

[[Page 63908]]

annual rate of pay to an hourly, daily, weekly, or biweekly rate.

Conversion

    On the first day of the first pay period beginning on or after 
December 11, 2001, agencies must convert the rate of basic pay of 
employees under the AAJ pay system to a rate of basic pay provided by 
these regulations. Section 534.605 requires agencies to set the rate of 
basic pay of an AAJ at the lowest rate of basic pay provided by 
Sec. 534.603(a) that equals or exceeds the rate of basic pay the AAJ 
received immediately before this date.

Locality Payments and Non-Foreign Area Cost-of-Living Allowances

    The President's Pay Agent (consisting of the Secretary of Labor and 
the Directors of the Office of Management and Budget and OPM) extended 
locality-based comparability payments to employees covered by the AAJ 
pay system under the authority of 5 U.S.C. 5304(h), effective on the 
first day of the first pay period beginning on or after April 20, 2001. 
Locality payments must be paid to employees in AAJ positions in 
accordance with 5 U.S.C. 5304 and 5 CFR part 531, subpart F. Under 
these rules, the locality rate of pay of employees in AAJ positions may 
not exceed the rate for level III of the Executive Schedule ($133,700 
in 2001).
    The interim regulations amend 5 CFR 591.203 to allow any employees 
in AAJ positions who are employed in an area covered by a nonforeign 
area cost-of-living allowance or post differential to receive that 
benefit.

Administrative Law Judges

    These interim regulations amend 5 CFR 930.210(a) to reflect changes 
in law concerning how the administrative law judge pay levels are set 
and adjusted. Section 1 of Public Law 106-97 (November 12, 1999) 
amended the ALJ pay law (5 U.S.C. 5372). Under this section, as 
amended, the rate of basic pay for AL-3/A may not be less than 65 
percent of the rate for level IV of the Executive Schedule, and the 
rate of basic pay for AL-1 may not exceed the rate for level IV of the 
Executive Schedule. (Section 5372(b)(4) gives the President authority 
to adjust the rates of basic pay for ALJs, subject to the pay range 
described above. Such adjustments are effective on the first day of the 
first applicable pay period beginning on or after the first day of the 
month in which General Schedule rates of basic pay are adjusted under 5 
U.S.C. 5303.) Based on agency inquiries, we also added a provision to 
Sec. 930.210(a) to clarify that agencies must use a 2,087-hour payroll 
divisor to determine the hourly, daily, weekly, and biweekly pay rate 
of an ALJ in accordance with 5 U.S.C. 5504.

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

    Pursuant to 5 U.S.C. 553(b)(3)(B) and 553(d)(3), I find that good 
cause exists for waiving the general notice of proposed rulemaking and 
making these regulations effective in less than 30 days. Section 645 of 
the Treasury and General Government Appropriations Act, 2001, as 
incorporated in Public Law 106-544 by section 101(a)(3) of that Public 
Law, became effective for service performed by an administrative 
appeals judge on the first day of the first applicable pay period 
beginning on or after April 20, 2001. These regulations must be issued 
as interim to ensure that agencies administer the new administrative 
appeals judge pay system in a consistent and equitable manner. These 
regulations must be made effective prior to January 1, 2002, to ensure 
that administrative appeals judges receive the January 2002 basic pay 
adjustment in a consistent and equitable manner.

Executive Order 12866, Regulatory Review

    This rule has been reviewed by the Office of Management and Budget 
in accordance with E.O. 12866.

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 534, 591, and 930

    Administrative practice and procedure, Computer technology, 
Government employees, Hospitals, Motor vehicles, Students, Travel and 
transportation expenses, Wages.

U.S. Office of Personnel Management
Kay Coles James,
Director.


    Accordingly, OPM is amending parts 534, 591, and 930 of title 5, 
Code of Federal Regulations, as follows:

PART 534--PAY UNDER OTHER SYSTEMS

    1. The authority citation for part 534 is amended to read as 
follows:

    Authority: 5 U.S.C. 1104, 5307, 5351, 5352, 5353, 5372b, 5376, 
5384, 5541, and 5550a.

    2. Subpart F is added to read as follows:

Subpart F--Pay for Administrative Appeals Judge Positions

Sec.
534.601   Coverage.
534.602   Definitions.
534.603   Rates of Basic Pay.
534.604   Pay Administration.
534.605   Conversion.

Subpart F--Pay for Administrative Appeals Judge Positions


Sec. 534.601  Coverage.

    (a) This subpart implements 5 U.S.C. 5372b and applies to 
administrative appeals judge positions, the duties of which are not 
classifiable above GS-15 under 5 U.S.C. 5108 and which primarily 
involve reviewing decisions of administrative law judges appointed 
under 5 U.S.C. 3105 and rendering final administrative decisions.
    (b) This subpart does not apply to--
    (1) Senior-level positions classified above GS-15 pursuant to 5 
U.S.C. 5108;
    (2) Scientific or professional positions established under 5 U.S.C. 
3104;
    (3) Senior Executive Service positions established under 5 U.S.C. 
3132 or 3151;
    (4) Positions for which pay is fixed by administrative action and 
limited to level IV of the Executive Schedule under 5 U.S.C. 5373;
    (5) Administrative law judge positions appointed under 5 U.S.C. 
3105; or
    (6) Positions in agencies that are excluded from chapter 51 of 
title 5, United States Code, by section 5102(a) or 5102(c) or other 
provision of law.


Sec. 534.602  Definitions.

    Administrative appeals judge position means a position not 
classified above GS-15 under 5 U.S.C. 5108 and for which the duties 
primarily involve reviewing decisions of administrative law judges 
appointed under 5 U.S.C. 3105 and rendering final administrative 
decisions.
    Administrative law judge means an individual in an administrative 
law judge position as that term is defined in section 930.202 of this 
chapter.
    Agency means an Executive agency, as defined in 5 U.S.C. 105, 
excluding the U.S. General Accounting Office.
    Head of an agency means the head of an Executive agency or an 
official who has been delegated the authority to act for the head of 
the agency in the matter concerned.


Sec. 534.603  Rates of Basic Pay.

    (a) The administrative appeals judge pay system (AA) has six rates 
of basic pay--AA-1, 2, 3, 4, 5, and 6. These rates correspond to the 
rates of basic pay for AL-3/A, B, C, D, E, and F, respectively, of the 
administrative law judge pay

[[Page 63909]]

system established under 5 U.S.C. 5372 and part 930, subpart B, of this 
chapter.
    (b) The rates of basic pay of the administrative appeals judge pay 
system will be adjusted at the same time and in the same manner as 
adjustments are made in the corresponding rates of basic pay for the 
administrative law judge pay system under 5 U.S.C. 5372.


Sec. 534.604  Pay Administration.

    (a) The head of each agency must fix the rate of basic pay for each 
administrative appeals judge position within the agency.
    (b) Upon initial appointment, an agency must set the rate of basic 
pay of an administrative appeals judge at the minimum rate AA-1 of the 
administrative appeals judge pay system, except as provided in 
paragraphs (b)(1), (b)(2), and (b)(3) of this section.
    (1) An agency must set the pay of an employee under the General 
Schedule pay system who is appointed to an administrative appeals judge 
position without a break in service at the lowest rate of basic pay of 
the administrative appeals judge pay system that equals or exceeds the 
rate of basic pay the employee received immediately prior to such 
appointment, not to exceed the rate of basic pay for AA-6. If the 
resulting basic pay increase is less than one-half of the dollar value 
of the employee's next within-grade increase, the agency must set the 
employee's rate of basic pay at the next higher rate of basic pay in 
the basic rate range of the administrative appeals judge pay system.
    (2) An agency may offer an administrative appeals judge applicant 
with prior Federal service a rate up to the lowest rate of basic pay of 
the administrative appeals judge pay system that equals or exceeds the 
employee's highest previous rate of basic pay in a Federal civil 
service position, not to exceed the rate of basic pay for AA-6.
    (3) An agency may offer an administrative appeals judge applicant 
with superior qualifications who is not a current Federal employee a 
higher than minimum rate when such a rate is clearly necessary to meet 
the needs of the Government. An agency may pay a higher than minimum 
rate of pay that is next above the applicant's existing pay or 
earnings, up to the maximum rate AA-6. Superior qualifications for 
applicants include, but are not limited to, having legal practice 
before the hiring agency, having practice in another forum with legal 
issues of concern to the hiring agency, or having an outstanding 
reputation among others in the field.
    (c) Administrative appeals judges will advance successively to 
rates AA-2, 3, and 4 upon completion of 52 weeks of service in the next 
lower rate, and to rates 5 and 6 upon completion of 104 weeks of 
service in the next lower rate. Advancement to a higher rate takes 
effect on the first day of the first pay period beginning on or after 
completion of the required period of service. Time in a nonpay status 
is creditable service in the computation of a waiting period in so far 
as it does not exceed 2 weeks for each 52 weeks of service. Time in a 
nonpay status is fully creditable if the absence is due to military 
service, as defined in 5 U.S.C. 8331(13), or receipt of injury 
compensation under chapter 81 of title 5, United States Code. Time 
under pay systems outside the administrative appeals judge pay system 
is not creditable service in computing the required waiting period, 
except that time under the administrative law judge pay system 
established under 5 U.S.C. 5372 is creditable when an individual moves 
from that system to the administrative appeals judge pay system without 
a break in service.
    (d) An agency must use the following procedures to convert an 
administrative appeals judge's annual rate of basic pay to an hourly, 
daily, weekly, or biweekly rate:
    (1) To derive an hourly rate, divide the annual rate of pay by 
2,087 and round to the nearest cent, counting one-half cent and over as 
the next higher cent.
    (2) To derive a daily rate, multiply the hourly rate by the number 
of daily hours of service required by the administrative appeals 
judge's basic daily tour of duty.
    (3) To derive a weekly or biweekly rate, multiply the hourly rate 
by 40 or 80, as the case may be.


Sec. 534.605  Conversion.

    On the first day of the first pay period beginning on or after 
December 11, 2001, agencies must convert the rate of basic pay of an 
administrative appeals judge to the lowest rate of basic pay provided 
by Sec. 534.603(a) of this subpart that equals or exceeds the rate of 
basic pay the administrative appeals judge received immediately before 
that date.

PART 591--ALLOWANCES AND DIFFERENTIALS

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

    3. The authority citation for subpart B 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., p. 338

    .4. A new paragraph (a)(8) is added to Sec. 591.203 to read as 
follows:


Sec. 591.203  Employees covered.

    (a) * * *
    (8) Administrative appeals judges paid under 5 U.S.C. 5372b.
* * * * *

PART 930--PROGRAMS FOR SPECIFIC POSITIONS AND EXAMINATIONS 
(MISCELLANEOUS)

Subpart B--Appointment, Pay and Removal of Administrative Law 
Judges

    5. The authority citation for subpart B continues to read as 
follows:

    Authority: 5 U.S.C. 1104(a)(2), 1305, 3105, 3323(b), 3344, 
4301(2)(D), 5372, 7521.


    6. In Sec. 930.210, paragraph (a) is revised to read as follows:


Sec. 930.210  Pay.

    (a) OPM will place each administrative law judges position in one 
of the three grades or levels of basic pay, AL-3, AL-2, or AL-1, of the 
Administrative Law Judge Pay System established under 5 U.S.C. 5372 in 
accordance with this section. AL-3 has six rates of basic pay, A, B, C, 
D, E, and F.
    (1) The rate of basic pay for AL-3, rate A, may not be less than 65 
percent of the rate of basic pay for level IV of the Executive 
Schedule. The rate of basic pay for AL-1 may not exceed the rate for 
level IV of the Executive Schedule.
    (2) The President will determine the appropriate adjustment for 
each rate in the Administrative Law Judge Pay System, subject to 
paragraph (a)(1) of this section. Such adjustments will take effect on 
the first day of the first applicable pay period beginning on or after 
the first day of the month in which adjustments in the General Schedule 
rates of basic pay under 5 U.S.C. 5303 take effect.
    (3) An agency must use the following procedures to convert an 
administrative law judge's annual rate of basic pay to an hourly, 
daily, weekly, or biweekly rate:
    (i) To derive an hourly rate, divide the annual rate of pay by 
2,087 and round to the nearest cent, counting one-half cent and over as 
the next higher cent.
    (ii) To derive a daily rate, multiply the hourly rate by the number 
of daily hours of service required by the administrative appeals 
judge's basic daily tour of duty.
    (iii) To derive a weekly or biweekly rate, multiply the hourly rate 
by 40 or 80, as the case may be.
* * * * *
[FR Doc. 01-30530 Filed 12-10-01; 8:45 am]
BILLING CODE 6325-39-P