[Federal Register Volume 73, Number 99 (Wednesday, May 21, 2008)]
[Rules and Regulations]
[Pages 29387-29389]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-11283]



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  Federal Register / Vol. 73, No. 99 / Wednesday, May 21, 2008 / Rules 
and Regulations  

[[Page 29387]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 351

RIN 3206-AL19


Representative Rate; Order of Release From Competitive Level; 
Assignment Rights

AGENCY: U.S. Office of Personnel Management.

ACTION: Final rule.

-----------------------------------------------------------------------

SUMMARY: The U.S. Office of Personnel Management (OPM) is issuing final 
regulations clarifying how an agency determines employees' retention 
rights when the agency has positions in one or more pay bands. These 
regulations also clarify the order in which an agency releases 
employees from a competitive level. Finally, these regulations clarify 
how an agency determines employees' retention rights when a competitive 
area includes more than one local commuting area.

DATES: Effective Date: These regulations are effective June 20, 2008.

FOR FURTHER INFORMATION CONTACT: Thomas A. Glennon by telephone on 202-
606-0960, by FAX on 202-606-2329, by TDD on 202-418-3134, or by e-mail 
at [email protected].

SUPPLEMENTARY INFORMATION: On March 15, 2007, OPM published proposed 
reduction in force regulations in the Federal Register at 72 FR 12122. 
Interested parties could submit comments to OPM on the regulations 
through May 14, 2007. OPM received comments from two agencies and one 
individual on these proposed regulations. Although OPM received 
comments from one agency and the individual shortly after the May 14, 
2007, closing date, we considered these comments in publishing final 
regulations. We discuss all the comments below.
    The individual asked OPM to clarify that the pay band provisions in 
the proposed regulations apply only to reduction in force actions under 
part 351 of title 5, Code of Federal Regulations (CFR), but do not 
apply to actions under demonstration projects. We found that no 
revision is necessary. If an alternative retention system (such as a 
retention system under a demonstration project) is not subject to part 
351 of title 5, that system must clearly state the legal basis for 
exclusion from 5 CFR part 351.
    The individual also asked OPM to clarify the definition of 
``representative rate'' in section 351.203 for a General Schedule (GS) 
employee stationed outside the contiguous states (e.g., stationed in 
Alaska, Hawaii or overseas). We have not revised the regulations to 
address this suggestion. The definition of representative rate for any 
employee stationed outside the contiguous states remains unchanged and 
continues as the fourth step of the grade for a position covered by the 
GS using the base rate for GS positions. Employees in Alaska and Hawaii 
may receive nonforeign area cost-of-living allowance payments under 5 
U.S.C. 5941. Employees in overseas locations may receive cost-of-living 
allowances under 5 U.S.C. 5924. Such allowances are not basic pay nor 
are they treated in a manner similar to locality pay for GS employees. 
Accordingly, such allowances are not included in a representative rate 
for reduction in force purposes.
    One agency asked OPM to clarify the definition of ``representative 
rate'' in section 351.203 for a Federal Wage System (FWS) position. We 
are adopting this suggestion by adding a reference in section 351.203 
to the definition of ``representative rate'' in 5 CFR 532.401 for FWS 
positions. Section 532.401 provides that the representative rate for an 
FWS position is the second rate on a five-rate regular wage schedule.
    One agency suggested that OPM delete the definition of 
``representative rate'' for pay band positions in paragraph (3) of 
proposed section 351.203. For an alternative, the agency suggested 
that, in reduction in force competition, it would instead use the pay-
setting procedures that apply when one of its employees moves 
internally (e.g., via actions such as reassignment or voluntary 
demotion) from a pay band position to a position not covered by a pay 
band. We did not adopt this suggestion. The Supplementary Information 
section of the proposed regulations explained that comparing 
representative rates is an impartial procedure to determine employees' 
potential ``bump'' or ``retreat'' right to a position on a different 
retention register when the positions are under different pay schedules 
(e.g., to determine the assignment rights of employees to and from 
positions covered by the GS system, FWS, and pay bands). In contrast, 
an agency-specific procedure to set pay based upon a voluntary or 
management-initiated movement from a pay band position to a position 
not covered by a pay band may include variables not covered by the 
proposed definition of ``representative rate'' for pay band positions 
in section 351.203. As a result, an agency-specific pay-setting 
procedure would not necessarily ensure that all competing employees 
have equivalent retention rights to and from positions under different 
pay schedules.
    The two agencies suggested that section 351.403(a)(5) include all 
the criteria that an agency uses to determine whether two or more 
positions are interchangeable for purposes of establishing reduction in 
force competitive levels. Another comment asked for clarification when 
pay band positions are not interchangeable. We found that no revision 
is needed because section 351.403(a)(5) as written explains that the 
agency applies section 351.403(a)(1) through (4) to determine whether 
positions are interchangeable and must be placed in the same 
competitive level.
    One agency asked whether section 351.403(a)(5) requires an agency 
to establish separate competitive levels for pay band positions with 
different representative rates. The agency also asked whether all 
positions in a pay band must have different representative rates if the 
pay band includes more than one competitive level. As written, section 
351.403(a)(5) provides that the agency establishes each pay band 
competitive level to include interchangeable positions. Only then does 
the agency determine which representative rate is applicable to that 
competitive level.
    One agency and the individual asked that OPM provide criteria for 
the agency

[[Page 29388]]

to consider under section 351.701(g) when determining which 
representative rate to use for reduction in force competition when a 
competitive area includes more than one local commuting area. We are 
not adopting this suggestion because we believe that the agency should 
have full discretion to determine which local commuting area is used as 
the basis for reduction in force representative rates under section 
351.701(g). This is consistent with the agency's responsibility to make 
decisions under section 351.204.
    The individual commenter noted that employees' potential assignment 
rights may differ, depending upon which local commuting area the agency 
designates under section 351.701(g) as the basis for representative 
rates when a competitive area includes more than one local commuting 
area. We explained in the Supplementary Information section of the 
proposed regulations that agencies will, for the first time, determine 
employees' reduction in force representative rates using a locality 
component for both GS and FWS positions. This is more equitable in 
determining employees' assignment rights than the current procedure in 
which the representative rate of FWS employees is based on a local 
prevailing rate, but the representative rate of GS employees does not 
include a locality component.
    One agency asked OPM to clarify the range of potential assignment 
rights under section 351.708(h) when the competitive area includes only 
pay band positions. We found that no revision is needed. The language 
of the proposed regulation, which is further explained in the 
SUPPLEMENTARY INFORMATION, provides that a competitive service employee 
has a potential assignment right to a position in the same pay band or 
one pay band lower than the pay band from which released. In addition, 
a competitive service preference eligible employee with a service-
connected disability of 30 percent or more has a potential assignment 
right to a position in the same pay band or up to two pay bands lower 
than the pay band from which released. These grade limits defining the 
range of potential assignment rights are consistent with the grade 
limits for a pay band environment that OPM approved and tested for 
demonstration projects for more than two decades.
    One agency asked OPM to provide criteria for the agency to consider 
when designating the representative rate for pay band positions under 
paragraph (3) of the definition in section 351.203 when, under section 
351.701(i), the competitive area includes pay band positions and other 
positions not covered by a pay band. We are not adopting this 
suggestion because we believe that the agency should have full 
discretion to designate the representative rate for pay band positions, 
consistent with section 351.203 and the agency's responsibility to make 
decisions under section 351.204.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant economic 
impact on a substantial number of small entities because it affects 
only certain Federal employees.

Executive Order 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 351

    Administrative practice and procedure, Government employees.

    U.S. Office of Personnel Management.
Linda M. Springer,
Director.

0
Accordingly, OPM is amending part 351 of title 5, Code of Federal 
Regulations, as follows:

PART 351--REDUCTION IN FORCE

0
1. The authority citation for part 351 continues to read as follows:

    Authority: 5 U.S.C. 1302, 3502, 3503; sec. 351.801 also issued 
under E.O. 12828, 58 FR 2965.


0
2. In Sec.  351.203, the definition of ``representative rate'' is 
revised to read as follows:


Sec.  351.203  Definitions.

    In this part:
* * * * *
    Representative rate means:
    (1) The fourth step of the grade for a position covered by the 
General Schedule, using the locality rate authorized by 5 U.S.C. 5304 
and subpart F of part 531 of this chapter for General Schedule 
positions;
    (2) The prevailing rate for a position covered by a wage-board or 
similar wage-determining procedure, such as provided in the definition 
of representative rate for Federal Wage System positions in 5 CFR 
532.401 of this chapter;
    (3) For positions in a pay band, the rate (or rates) the agency 
designates as representative of that pay band or competitive levels 
within the pay band, including (as appropriate) any applicable locality 
payment authorized by 5 U.S.C. 5304 and subpart F of part 531 of this 
chapter (or equivalent payment under other legal authority); and
    (4) For other positions (e.g., positions in an unclassified pay 
system), the rate the agency designates as representative of the 
position, including (as appropriate) any applicable locality payment 
authorized by subpart F of part 531 (or equivalent payment under other 
legal authority).
* * * * *

0
3. In Sec.  351.403, paragraph (c)(4) is revised, and paragraphs 
(a)(5), (c)(5), and (c)(6) are added, to read as follows:


Sec.  351.403  Competitive level.

    (a) * * *
    (5) If a competitive area includes positions in one or more pay 
bands, each set of interchangeable positions in the pay band under 
paragraphs (a)(1) through (4) of this section is a separate competitive 
level (e.g., with interchangeable positions under paragraphs (a)(1) 
through (4) of this section, each pay band is one competitive level; if 
the positions are not interchangeable under paragraphs (a)(1) through 
(4) of this section, the pay band may include multiple competitive 
levels).
* * * * *
    (c) * * *
    (4) A difference in the local wage areas when a competitive area 
includes positions covered by more than one wage-board or similar wage-
determining procedure;
    (5) A difference in locality payments under 5 U.S.C. 5304 and 
subpart F of part 531 of this chapter when a competitive level includes 
more than one locality pay area listed in Sec.  531.603 of this 
chapter; or
    (6) Representative rates in different local commuting areas when a 
competitive area includes General Schedule (GS) and Federal Wage System 
(FWS) positions in multiple GS locality pay areas, and/or FWS local 
wage areas.


0
4. Section 351.601 is revised to read as follows:


Sec.  351.601  Order of release from competitive level.

    (a) Each agency must select competing employees for release from a 
competitive level (including release from a competitive level involving 
a pay band) under this part in the inverse order of retention standing, 
beginning with the employee with the lowest retention standing on the 
retention register. An agency may not release a competing employee from 
a competitive level while retaining in that level an

[[Page 29389]]

employee with lower retention standing except:
    (1) As required under Sec.  351.606 when an employee is retained 
under a mandatory exception or under Sec.  351.806 when an employee is 
entitled to a new written notice of reduction in force; or
    (2) As permitted under Sec.  351.607 when an employee is retained 
under a permissive continuing exception or under Sec.  351.608 when an 
employee is retained under a permissive temporary exception.
    (b) At its option an agency may provide for intervening 
displacement within the competitive level before final release of the 
employee with the lowest-retention standing from the competitive level.
    (c) When employees in the same retention subgroup have identical 
service dates and are tied for release from a competitive level, the 
agency may select any tied employee for release.


0
5. In Sec.  351.701, paragraphs (g), (h), and (i) are added, to read as 
follows:


Sec.  351.701  Assignment involving displacement.

* * * * *
    (g) If a competitive area includes more than one local commuting 
area, the agency determines assignment rights under this part on the 
basis of the representative rates for one local commuting area within 
the competitive area (i.e., the same local commuting area used to 
establish competitive levels under Sec.  351.403(c)(4), (5), and (6)).
    (h) If a competitive area includes positions under one or more pay 
bands, a released employee shall be assigned in accordance with 
paragraphs (a) through (d) of this section to a position in an 
equivalent pay band or one pay band lower, as determined by the agency, 
than the pay band from which released. A preference eligible with a 
service-connected disability of 30 percent or more must be assigned in 
accordance with paragraphs (a) through (d) of this section to a 
position in an equivalent pay band or up to two pay bands lower, as 
determined by the agency, than the pay band from which released.
    (i) If a competitive area includes positions under one or more pay 
bands, and other positions not covered by a pay band (e.g., GS and/or 
FWS positions), the agency provides assignment rights under this part 
by:
    (1) Determining the representative rate of positions not covered by 
a pay band, consistent with Sec.  351.203;
    (2) Determining the representative rate of each pay band, or 
competitive level within the pay band(s), consistent with Sec.  
351.203;
    (3) As determined by the agency, providing assignment rights under 
paragraph (b) of this section (bumping), or paragraphs (c) and (d) of 
this section (retreating), consistent with the grade intervals covered 
in paragraphs (b)(2) and (c)(2) of this section, and the pay band 
intervals in paragraph (h) of this section.

[FR Doc. E8-11283 Filed 5-20-08; 8:45 am]
BILLING CODE 6325-39-P