[Federal Register Volume 69, Number 194 (Thursday, October 7, 2004)]
[Proposed Rules]
[Pages 60097-60098]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 04-22530]


 ========================================================================
 Proposed Rules
                                                 Federal Register
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 This section of the FEDERAL REGISTER contains notices to the public of 
 the proposed issuance of rules and regulations. The purpose of these 
 notices is to give interested persons an opportunity to participate in 
 the rule making prior to the adoption of the final rules.
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  Federal Register / Vol. 69, No. 194 / Thursday, October 7, 2004 / 
Proposed Rules  

[[Page 60097]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 550

RIN 3206-AK62


Computation of Pay for Biweekly Pay Periods

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management is issuing proposed 
regulations to implement a statutory amendment that requires the pay of 
heads of agencies and other designated employees to be calculated and 
paid on a biweekly basis instead of on a monthly basis. The proposed 
regulations also prescribe the circumstances under which an agency may 
calculate the pay of an employee on a biweekly pay period basis whose 
pay otherwise would be calculated on a monthly or other basis.

DATES: Comments must be received on or before December 6, 2004.

ADDRESSES: Send or deliver comments to Donald J. Winstead, Deputy 
Associate Director for Pay and Performance Policy, Office of Personnel 
Management, Room 7H31, 1900 E Street, NW., Washington, DC 20415, Fax: 
(202) 606-4264, or e-mail at [email protected].

FOR FURTHER INFORMATION CONTACT: Ronald Genua by telephone at (202) 
606-2858; by Fax at (202) 606-4264; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
issuing proposed regulations to calculate pay on a biweekly pay period 
basis for employees whose pay was formerly calculated on a monthly 
basis. Section 1124 of Public Law 108-136 (November 24, 2003) amended 5 
U.S.C. 5504 to require the pay of heads of agencies (including the 
heads of military departments) to be calculated and paid on a biweekly 
basis instead of on a monthly basis. This law also amended 5 U.S.C. 
5504 to cover members of the Foreign Service, the Senior Foreign 
Service, and the Federal Bureau of Investigation and Drug Enforcement 
Administration Senior Executive Service. In addition, 5 U.S.C. 
5504(c)(3), as amended, allows an agency to make exceptions and elect 
to calculate the pay of employees on a biweekly pay period basis whose 
pay otherwise would be calculated on a monthly or other basis. The law 
requires OPM to issue regulations providing guidelines for these 
exceptions to be made.
    Section 1124 became effective on the first day of the first pay 
period beginning on or after the date of enactment of the Act (November 
24, 2003). Since biweekly pay periods for Federal employees begin on a 
Sunday, this provision became effective on November 30, 2003, for most 
officials and employees. OPM notified agencies of this legislative 
change on December 24, 2004, in a memorandum to human resources 
directors. (See http://www.opm.gov/oca/compmemo/2003/2003-21.asp.)

Computation of Pay

    The change in the method of computing pay for heads of agencies and 
other affected employees has no effect on the pay they receive for a 
given period of work. Prior to the change in 5 U.S.C. 5504, the heads 
of agencies received a full month's pay for each full month of service 
(or fraction thereof). For monthly pay computations, an employee's 
annual salary was divided by 12 to determine the monthly amount. Under 
the new law, these employees receive a full pay period's worth of pay 
for each full pay period of service (or fraction thereof). For biweekly 
pay computations, an employee's annual salary is divided by 2,087 to 
determine an hourly rate, and the hourly rate is multiplied by 80 to 
determine the biweekly rate.

Employees Covered

    As a result of the amendment to 5 U.S.C. 5504, the pay of most 
Federal employees in executive branch agencies is calculated on a 
biweekly pay period basis. However, some categories of employees 
continue to be excluded because they are excluded from the definition 
of ``employee'' in 5 U.S.C. 5541(2) (except as provided in 5 U.S.C. 
5504(c)(2)(B)). For example, members of the Uniformed Division of the 
Secret Service and the U.S. Park Police are not covered by 5 U.S.C. 
5504 because they are excluded from the definition of ``employee'' by 5 
U.S.C. 5541(2)(iv). However, agencies may have established biweekly pay 
period computations for such employees under separate legal authority.

Exceptions

    In Sec.  550.605, OPM proposes to allow an agency under certain 
circumstances to deem that an otherwise excluded employee meets the 
definition of a covered employee under Sec.  550.602 for the purpose of 
computing his or her pay on a biweekly pay period basis. OPM proposes 
to allow agencies to make exceptions in situations where continuing to 
calculate an employee's pay on a monthly or other basis would diminish 
the level of services provided to the public by the agency. In 
addition, we propose to allow an agency head or designee to make an 
exception to include otherwise excluded employees when he or she 
determines that computing the pay of such employees under the rules in 
5 U.S.C. 5504 would provide cost savings in agency operations. If an 
agency chooses to make such an exception, an employee's hourly rate of 
pay would be calculated by using a divisor of 2,087. Each agency that 
decides to make an exception under Sec.  550.605 must notify OPM in 
writing of any exceptions made under that authority.

Regulatory Flexibility Act

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

E.O. 12866, Regulatory Review

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

List of Subjects in 5 CFR Part 550

    Administrative practice and procedure, Claims, Government 
employees, Wages.


[[Page 60098]]


Office of Personnel Management.
Kay Coles James,
Director.

    Accordingly, OPM is proposing to amend part 550 of title 5 of the 
Code of Federal Regulations as follows:

PART 550--PAY ADMINISTRATION (GENERAL)

    1. A new subpart F is added to part 550 to read as follows:
Subpart F--Computation of Pay for Biweekly Pay Periods
Sec.
550.601 Purpose.
550.602 Coverage.
550.603 Definitions.
550.604 Biweekly pay periods and computation of pay.
550.605 Exceptions.
550.606 Reporting exceptions to OPM.

    Authority: 5 U.S.C. 5504; Pub. L. 108-136, 117 Stet. 1637.

Subpart F--Computation of Pay for Biweekly Pay Periods


Sec.  550.601  Purpose.

    This subpart provides regulations to implement 5 U.S.C. 5504 to 
compute pay on a biweekly pay period basis for employees in an agency, 
as defined in Sec.  550.603.


Sec.  550.602  Coverage.

    (a) This subpart applies to--
    (1) An employee in or under an agency, except an employee excluded 
by paragraph (b) of this section;
    (2) The head of an agency;
    (3) The head of a military department, as defined in 5 U.S.C. 102;
    (4) A Foreign Service officer;
    (5) A member of the Senior Foreign Service;
    (6) A member of the Senior Executive Service; or
    (7) A member of the Federal Bureau of Investigation and Drug 
Enforcement Administration Senior Executive Service.
    (b) This subpart does not apply to--
    (1) An employee on the Isthmus of Panama in the service of the 
Panama Canal Commission; or
    (2) An employee or individual excluded from the definition of 
employee in 5 U.S.C. 5541(2), except employees excluded by 5 U.S.C. 
5541(2)(ii), (iii), and (xiv) through (xvii) are covered by this 
subpart.


Sec.  550.603  Definitions.

    In this subpart--
    Agency means an executive agency, as defined in 5 U.S.C. 105.
    Employee has the meaning given that term in 5 U.S.C. 2105.


Sec.  550.604  Biweekly pay periods and computation of pay.

    Agencies must apply the biweekly pay period and computation of pay 
provisions of 5 U.S.C. 5504 for employees covered by Sec.  550.602(a).


Sec.  550.605  Exceptions.

    An agency head or designee may deem that an employee excluded from 
coverage under Sec.  550.602(b)(2) is covered by 5 U.S.C. 5504 in 
situations where he or she determines that continuing to calculate the 
pay of such employees on a monthly or other basis would diminish the 
level of services provided to the public by the agency. An agency head 
or designee also may deem that otherwise excluded employees are covered 
by 5 U.S.C. 5504 when he or she determines that computing the pay of 
such employees under that provision of law would provide cost savings 
in agency operations.


Sec.  550.606  Reporting exceptions to OPM.

    Each agency must notify OPM in writing of any exceptions made under 
Sec.  550.605.

[FR Doc. 04-22530 Filed 10-6-04; 8:45 am]
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