[Federal Register Volume 73, Number 155 (Monday, August 11, 2008)]
[Rules and Regulations]
[Pages 46530-46532]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-18447]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 351

RIN 3206-AL64


Competitive Area

AGENCY: U.S. Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The U.S. Office of Personnel Management (OPM) is issuing final 
regulations that provide agencies with the option of establishing a 
reduction in force (RIF) competitive area that only includes pay band 
positions. An agency has this option when a RIF competitive area 
otherwise includes pay band positions and other positions that are not 
covered by one or more pay bands.

DATES: Effective Date: These regulations are effective August 11, 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 April 15, 2008, OPM published proposed 
reduction in force (RIF) regulations in the Federal Register at 73 FR 
20180. Interested parties could submit comments to OPM on the 
regulations through May 15, 2008. OPM received timely comments from 
three agencies, two unions, and two individuals on these proposed 
regulations. We considered all of the timely comments in publishing 
this final regulation. Below is a discussion of the specific comments.

Discussion of Comments

    All three agencies concurred with the option of establishing a 
separate competitive area for pay band positions. One agency supported 
our proposed regulation without any additional comments or suggestions.
    Two agencies concurred, but had additional comments. One agency 
suggested that OPM further revise the RIF regulations to allow agencies 
the additional option of establishing separate competitive areas for 
individual pay band systems when a competitive area includes more than 
one pay band system. OPM did not adopt this suggestion. Because all pay 
band systems have common characteristics flowing from the consolidation 
of former graded positions into broad pay bands, we see no need to 
further allow agencies the additional option of establishing separate 
competitive areas for individual pay

[[Page 46531]]

bands when these individual pay bands would otherwise be included in 
the same competitive area.
    The other agency suggested that OPM include criteria for the agency 
to consider when deciding whether to define separate competitive areas 
under Sec.  351.402(e) for pay band and for non-pay band positions. The 
agency also suggested that OPM provide criteria on what types of 
documentation are appropriate under Sec.  351.403(a)(2)(ii) to 
supplement an employee's official position description for purposes of 
establishing one or more pay band competitive levels. OPM did not adopt 
either suggestion. Because each agency-specific RIF situation is 
unique, OPM believes that the agency conducting the RIF has the best 
information to make RIF-related decisions, including the definition of 
what is an appropriate competitive area or competitive areas for its 
competing employees, and what documentation is appropriate to 
supplement the position descriptions of employees in pay band 
positions. Section 351.204 provides that each agency covered by 5 CFR 
part 351 is responsible for all decisions when following and applying 
the RIF regulations if the agency determines that a RIF is necessary.
    This agency also suggested that OPM revise the retention 
regulations to state that an agency retains the right to potentially 
redefine one or more competitive areas if the agency finds it necessary 
to conduct a subsequent RIF. OPM did not adopt this suggestion. Present 
Sec.  351.201(c) provides that the agency's RIF decisions must be 
uniform and consistent with 5 CFR part 351 in any one RIF (i.e., the 
agency may potentially make different decisions applying the 5 CFR part 
351 regulations to a subsequent RIF).
    Finally, this agency suggested that OPM include definitions of 
``competitive area'' and ``competitive level'' in section 351.203 
(``Definitions''). OPM did not adopt this suggestion. Section 351.402 
specifically covers RIF competitive areas while section 351.403 
specifically covers RIF competitive levels.
    Regarding the two union comments, both unions commented that the 
proposed regulations would allow agencies to improperly target certain 
employees for RIF, while unfairly restricting the placement 
opportunities of these employees. OPM does not agree with this 
assertion. Agencies must apply the same level of objectivity and 
administrative probity in using these provisions as they do in making 
any personnel-related decision. An employee who believes that a 
competitive area is unlawfully constituted may, as applicable, contest 
the agency's action. Further, the RIF competitive area is only one of 
many factors that impact an employee's placement opportunities. Factors 
such as an individual's veterans' preference status, tenure (e.g., 
permanent v. temporary), performance appraisal (e.g., Exceptional v. 
Fully Successful), and years of service all play a part in an 
employee's final outcome in a RIF scenario.
    One union, in objecting to the proposed regulation, commented that 
potential separate competitive areas in a pay band environment reduces 
the relative weight of seniority in RIF competition, which the union 
suggests is a hallmark of the RIF system. OPM disagrees. The proposed 
RIF regulation continues to assign the same relative weight to each of 
the four retention factors mandated in 5 U.S.C. 3502(a)(1)-(4): (1) 
Tenure (i.e., type of appointment), (2) veterans' preference, (3) total 
creditable civilian and uniformed service, and (4) additional retention 
service credit for performance. We note that although the RIF 
regulation, and the determining factors, have been modified through the 
years, the one true constant of the RIF system since 1876 has been 
protection based on an individual's veterans' preference status, not 
necessarily the retention of senior employees.
    This union also commented that our proposal to allow separate RIF 
competitive areas for pay band environments was based on an assumption 
that a unified competitive area might create difficulty for the agency 
facing a RIF. The union suggested that changes to governmentwide rules 
should be based on facts, not guesses. To clarify, from our review of 
demonstration projects we know that certain inconsistencies exist 
between pay band positions and positions covered by the General 
Schedule (GS) or Federal Wage System (FWS). For example, pay band 
positions are subject to different rules than other positions covered 
by traditional pay systems (i.e., GS and FWS positions): (1) Each pay 
band covers a wide salary range that encompass multiple GS or FWS 
grades, (2) pay band positions are generally covered by generic 
position descriptions while GS and FWS positions have specific position 
descriptions keyed in part to the classification of each position, and 
(3) pay band positions are generally more closely linked to performance 
incentives than GS and FWS positions. What we do not know is the size 
or scope of any one RIF an agency may be facing. RIFs involving large 
numbers of pay band and non-pay band positions will be more disruptive 
than those with few mixed-positions. This is why we stated in the 
supplementary information of the proposed regulation published on April 
15, 2008, at page 73 FR 20180, that significant inconsistencies ``may'' 
result when a RIF competitive area includes pay band positions and 
positions covered by the General Schedule (GS) or Federal Wage System 
(FWS). The new Sec.  351.402(e) is an agency option, not a requirement, 
to permit agencies to assess their situation and determine how best to 
apply the RIF regulations to suit their needs. On May 21, 2008, at 73 
FR 29387, OPM published a final regulation covering how an agency may 
conduct a RIF in a competitive area that includes pay band and other 
positions not covered by a pay band system if the agency chooses that 
option.
    Of the two individuals who commented, one individual suggested that 
OPM include a definition of ``pay band'' for purposes of the 5 CFR part 
351 regulations. OPM did not adopt this suggestion. Each pay band 
system includes a specific definition of pay band applicable to that 
pay band system.
    This individual also suggested that OPM provide criteria on what 
types of records may be considered under Sec.  351.403(a)(2)(ii) to 
supplement an employee's official position description when 
establishing pay band competitive levels. OPM did not adopt this 
suggestion. As noted above in response to an agency's similar 
suggestion, OPM believes that the agency conducting the RIF has the 
best information to make RIF-related decisions, including what records 
are appropriate to supplement the position descriptions of employees in 
pay band positions.
    The other individual is concerned about how a separate competitive 
area could restrict the potential retention rights of employees who are 
not covered by a pay band system. As noted above, OPM covered its 
rationale and justification for this option in the ``Explanation'' 
material for the proposed regulations published on April 15, 2008, at 
page 73 FR 20180. One competitive area definition does not necessarily 
make an individual employee more or less subject to release by RIF than 
if the agency had retained or implemented a different competitive area 
definition.

Revisions Made by Final Regulations

    OPM is adopting the proposed regulations without change. The final 
regulation makes the following changes to competitive area and 
competitive level that are summarized below.

[[Page 46532]]

Revisions to Competitive Area

    New Sec.  351.402(e) provides that when an agency finds that a 
competitive area defined under Sec.  351.402(b) includes pay band 
positions and positions not covered by a pay band, at its discretion 
the agency may define a competitive area otherwise consistent with 
Sec.  351.402 to include only pay band positions.
    Section 351.402(b) is also revised to include a reference to new 
Sec.  351.402(e).

Revisions to Competitive Level

    Section 351.403(a)(2) is renumbered as Sec.  351.403(a)(2)(i) and 
revised to clarify that, except as provided in new Sec.  
351.403(a)(2)(ii) for pay band positions, competitive level 
determinations are based on each employee's official position of record 
(including the official position description), not the employee's 
personal qualifications.
    New Sec.  351.403(a)(2)(ii) provides that, to establish a 
competitive level comprised of pay band positions, an agency may 
supplement an employee's official position with other applicable 
records that document the employee's actual duties and 
responsibilities. Note that Sec.  351.403(a)(2)(ii) also applies to RIF 
competition in a competitive area that includes pay band and other 
positions.

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.  351.402, paragraph (b) is revised, and paragraph (e) is 
added, to read as follows:


Sec.  351.402  Competitive area.

* * * * *
    (b) A competitive area must be defined solely in terms of the 
agency's organizational unit(s) and geographical location and, except 
as provided in paragraph (e) of this section, it must include all 
employees within the competitive area so defined. A competitive area 
may consist of all or part of an agency. The minimum competitive area 
is a subdivision of the agency under separate administration within the 
local commuting area.
* * * * *
    (e) When an agency finds that a competitive area defined under 
paragraph (b) of this section includes pay band positions and positions 
not covered by a pay band, the agency may, at its discretion, define a 
separate (and additional) competitive area, otherwise consistent with 
paragraph (b) of this section, to include only pay band positions. The 
original competitive area would then include only the remaining 
positions (i.e., those positions not covered by a pay band).

0
3. In Sec.  351.403, paragraph (a)(2) is revised to read as follows:


Sec.  351.403  Competitive level.

    (a) * * *
    (2)(i) Except as provided in paragraph (a)(2)(ii) of this section 
for pay band positions, competitive level determinations are based on 
each employee's official position of record (including the official 
position description), not the employee's personal qualifications.
    (ii) To establish a competitive level comprised of pay band 
positions, an agency may supplement an employee's official position of 
record with other applicable records that document the employee's 
actual duties and responsibilities.
* * * * *
 [FR Doc. E8-18447 Filed 8-8-08; 8:45 am]
BILLING CODE 6325-39-P