[Federal Register Volume 73, Number 217 (Friday, November 7, 2008)]
[Rules and Regulations]
[Pages 66157-66160]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E8-26559]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 300

RIN 3206-AL18


Time-in-Grade Rule Eliminated

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is eliminating the 
time-in-grade restriction on advancement to competitive service 
positions in the General Schedule. The rule eliminates the 52-week 
time-in-grade requirement for promotions. Employees must continue to 
meet occupational qualification standard requirements and any 
additional job-related qualification requirements established for the 
position.

DATES: The rule is effective March 9, 2009.

FOR FURTHER INFORMATION CONTACT: Ms. Janice Warren by telephone (202) 
606-0960; by FAX (202) 606-2329; by TTY (202) 418-3134; or by e-mail 
[email protected].

SUPPLEMENTARY INFORMATION: On February 6, 2008, OPM published in the 
Federal Register at 73 FR 6857 a proposal to eliminate the time-in-
grade (TIG) restriction found in 5 CFR part 300, subpart F. The 
restriction applies to Federal employees in competitive service General 
Schedule positions at grades 5 and above. These employees qualify for 
promotions to higher grades if they have: (1) At least one year of 
specialized experience equivalent in difficulty to the next lower grade 
level or (in some cases) the equivalent education; and (2) service of 
at least 52 weeks at their current grade (known as ``time in grade'').
    The public comment period for the proposed regulation ended on 
April 7, 2008. We received comments from seven agencies, five unions, 
one national employee organization, and 33 individuals. We also 
received 61 form letters from individuals. We carefully considered the 
comments; as a result, we have decided to eliminate the time-in-grade 
restriction. The final regulation will become effective 120 days after 
the publication date of this notice in order to give agencies time to 
amend policies and communicate changes to their human resources staff 
and employees. Below is a discussion of the comments OPM received.

Comment Extension

    The national employee organization and almost half of the form 
letter commenters suggested extending the comment period because the 
supplementary information accompanying the proposed rule provided 
incorrect dates for OPM's prior proposals to eliminate the time-in-
grade restrictions. The February 6, 2008, proposal stated that OPM 
published its prior proposals on June 14, 1995, and January 10, 1996. 
In fact, they were published on June 15, 1994, and January 10, 1995. 
However, the February 6, 2008 proposal provided correct citations to 
the Federal Register notices for the prior proposals at 59 FR 30717 and 
60 FR 2546, respectively.
    We are not extending the comment period. OPM provided the dates and 
citations for its previously-published proposals as background 
information only. Potential commenters could adequately evaluate the 
February 6, 2008 proposal without reviewing the prior proposals. 
Moreover, the February 6, 2008 proposal supplied correct Federal 
Register citations for both of the previously-published proposals, 
thereby adequately facilitating their review by potential commenters.

Potential for Abuse and Favoritism

    Many commenters stated that abolishing the time-in-grade 
requirement would lead to abuse of a manager's promotion authority, 
primarily because it would allow managers to promote their favorite 
employees. These commenters believe that eliminating the time-in-grade

[[Page 66158]]

requirement will subject agencies to charges of disparate treatment, 
and that the requirement ensures fairness and equity in promotions. One 
commenter also thinks too many individuals will reach their full 
performance levels in their positions too soon.
    We disagree. The time-in-grade requirement is only one of the 
requirements for eligibility for promotion. Managers must still select 
only from those individuals who have at least one year of specialized 
experience equivalent in difficulty to the next lower grade level or 
(in some cases) the equivalent education. Moreover, individuals must 
meet occupational qualification standard requirements and any 
additional job-related qualification requirements established for the 
position.
    Further, since the advent of the merit system, Federal managers 
always have possessed discretion to choose whom to promote. Managers 
are presumed to act in good faith in making employment decisions. In 
addition, there are safeguards in place to protect the merit system. 
Section 2302, which enumerates prohibited personnel practices, defines 
a personnel action as including a promotion, and enhances merit system 
protections that have existed in various forms since the Nineteenth 
Century.
    When the time-in-grade restriction was first implemented, 
procedures for redressing prohibited personnel practices had not yet 
been enacted, and OPM's qualification standards did not exist. 
Eliminating the time-in-grade restriction does not alter management's 
responsibility to ensure that promotions are merit-based, and based on 
an individual's relative knowledge, skills, and abilities for a 
particular position.
    In its oversight role, OPM will continue to review agency promotion 
actions for adherence to applicable requirements and identify necessary 
corrective actions.
    The comment that the elimination of the time-in-grade requirement 
will result in individuals reaching their full performance levels too 
soon is merely speculative. The pace at which an employee advances to 
the full performance level of his or her position is a function of the 
employee's experience and/or knowledge, skills, and abilities relative 
to the qualification standard for the position. Even after the 
elimination of the time-in-grade restriction, qualification standards 
will provide the basis for managers to determine whether a particular 
employee is qualified for a promotion.
    One individual commented that although safeguards against improper 
promotions exist, these systems have proven to be ineffective in 
responding to alleged violations and prescribing corrective or 
disciplinary actions. OPM is not responding to this comment because the 
efficacy of those safeguards is beyond the scope of these regulations.

Impact on Minorities and Veterans

    Many commenters were concerned that eliminating the time-in-grade 
requirement would have a negative impact on minorities and veterans. 
There is no logical or factual basis for this concern. The time-in-
grade restriction applied to all individuals seeking promotion above 
grade 5 to a competitive service position, without regard to whether 
employees are minorities or veterans. Accordingly, eliminating the 
restriction negates one of the requirements for advancement applicable 
to all individuals, including minorities and veterans. In making 
selections for promotions, managers and human resources staff continue 
to be bound by applicable civil service laws and the laws pertaining to 
equal employment opportunity.

Using Qualification Standards and Delegated Examining

    A number of commenters questioned the use of qualification 
standards as the sole determination for promotion. They expressed 
concerns that qualification determinations will be subjective. Some 
commenters also felt that using qualification standards will lead to 
``grade creep.''
    Agencies use qualification standards to ensure candidates for 
promotion demonstrate at least one year or the appropriate level of 
education as outlined in the OPM Operating Manual Qualification 
Standards for General Schedule Positions (available on the OPM Web site 
(http://www.opm.gov)). An individual may demonstrate the required 
competencies (or knowledge, skills, and abilities) by paid or unpaid 
experience. This includes experience gained through school, volunteer 
work, military service, paid employment, or hobbies. Beyond the OPM 
qualification standards, agencies have discretion to establish 
additional requirements that employees must meet for promotions. 
Examples include a specified level of performance achieved; possession 
of specific job-related competencies (or knowledge, skills, and 
abilities); and evidence of ability to perform higher-level duties.
    Qualification standards are minimum requirements intended to 
identify applicants who are likely to be able to perform successfully 
on the job, and to screen out those who are unlikely to do so. 
Qualification standards are only one element of a responsible human 
resources management program. They are not designed to substitute for a 
careful analysis of applicants' competencies (or knowledge, skills, and 
abilities).
    Before qualification standards were implemented, agencies relied on 
time-in-grade to ensure that individuals were qualified for a higher-
graded position. Now that qualification standards are in place, 
agencies are in a position to use the standards to determine which 
applicants will be able to perform at the higher grade levels.
    With respect to the comment that the elimination of the time-in-
grade restriction will lead to ``grade creep,'' as noted previously, 
managers are obligated to make promotion decisions based on an 
individual's experience and/or knowledge, skills, and abilities 
relative to the qualification standard for the position.
    A number of commenters suggested that agencies should use delegated 
examining for identifying and promoting individuals who do not meet the 
time-in-grade requirement. This suggestion is based on a 
misunderstanding of examining procedures. An agency announces a vacancy 
using competitive examining procedures to allow candidates from outside 
the Federal workforce, current Federal employees without civil service 
status, and employees with civil service status in other positions to 
compete for the position. OPM has created ``delegated examining'' by 
entering into written agreements with most agencies authorizing them to 
conduct competitive examining. If a current Federal employee applies 
for a promotion under competitive examining procedures (typically 
through a vacancy announcement stating it is open to the general 
public), the employee does not need to meet a time-in-grade 
requirement.
    In contrast, promotions filled under the merit promotion procedures 
in 5 CFR part 335, are open to current or former Federal employees who 
hold or did hold a career or career-conditional appointment in the 
competitive service. If an eligible current Federal employee applies 
for a position at a higher grade through a merit promotion 
announcement, the employee must meet the time-in-grade requirement.
    The decision to fill a position using delegated examining or merit 
promotion procedures rests with the agency filling the position. If a 
current or former Federal employee who holds or did hold a career or 
career-conditional appointment in the competitive service wants to 
apply under both procedures,

[[Page 66159]]

the agency's own policy determines whether it will accept an 
application under both methods. If the agency allows the individual to 
apply only through merit promotion procedures, and the individual does 
not meet the time-in-grade requirement (but is otherwise qualified for 
the position), the agency will not consider the individual. Once the 
time-in-grade requirement is eliminated, the agency may consider 
otherwise qualified applicants who have less than 52 weeks in grade, 
regardless of the agency's chosen recruitment procedures.
    One union commented that elimination of TIG will lead to agencies 
bidding against each other on the establishment of a time-in-grade 
requirement for promotion. Once TIG is eliminated, agencies are not 
required to implement their own TIG requirement. Agencies will use 
qualification standards for determining whether an employee has met the 
specified criteria needed for promotion to the next highest grade 
level.

Effect on Within-Grade Increases

    Some commenters expressed concerns that elimination of the time-in-
grade requirement would result in a reduction in the number of within-
grade pay increases. Based on the descriptions of these concerns, we 
believe the commenters are referring to General Schedule (GS) within-
grade increases (WGIs) authorized by 5 U.S.C. 5335 and 5 CFR part 531, 
subpart D. It appears there may be some confusion between the time-in-
grade restriction for promotions and the waiting period for GS WGIs.
    To clarify, the rate range for each GS grade has 10 step rates. 
WGIs or step increases are periodic increases in a GS employee's rate 
of basic pay from one step of the grade of his or her position to the 
next higher step of that grade. One of the requirements for earning a 
WGI is that the employee must have completed the required waiting 
period for advancement to the next higher step. For employees with a 
scheduled tour of duty, the required waiting period is 52 weeks, 104 
weeks, or 156 weeks of creditable service, depending on the employee's 
current step. In contrast, time in grade is the amount of time one must 
stay at a particular grade (regardless of the step) in order to be 
eligible for promotion to the next higher grade level. Eliminating the 
time-in-grade requirement does not affect eligibility for WGIs.

Suggestions on OPM Actions

    A number of commenters provided suggestions regarding what OPM can 
do to ensure fairness and equity in promotions. Suggestions included 
monitoring promotion rates for Government employees, requiring reports, 
and conducting random audits of agencies. As mentioned earlier, OPM 
will continue to monitor agency promotion actions through our normal 
oversight function. We do not believe additional reporting requirements 
are necessary.
    One commenter suggested, as an alternative to time-in-grade 
elimination, that agencies give preference to individuals who are 
eligible for time in grade over those who are not eligible. We are not 
adopting this suggestion. Agency promotions are to be based on merit, 
using government-wide and agency-specific qualification standards. 
Therefore, OPM will no longer require that time in grade be considered 
in selecting individuals for promotions. Eliminating the time-in-grade 
restriction from the selection process reinforces the principle that 
promotions are based on an individual's ability to perform the 
requirements of the position, i.e. merit, and not the passage of time 
per se.
    One commenter suggested, rather than eliminating time in grade, 
that agencies give incentives such as student loan repayments, 
performance awards, retention allowances, superior qualification 
appointments, retention allowances, flexiplace, and alternative work 
schedules to reward employees. We are not adopting this suggestion 
because it is based on the mistaken assumption that the items listed 
serve the same purpose as the time-in-grade requirement. TIG is an 
eligibility factor for a promotion. The items listed by the commenter, 
however, are recruitment and retention tools that do not define 
eligibility for promotion. Thus, use of the items mentioned would not 
be equivalent to eliminating the time-in-grade requirement.

Time in Grade as an Observation Period

    One union suggested we keep the time-in-grade-restriction as a 
period for agencies to consider an employee's demonstrated ability to 
perform at the next highest grade level, and to provide supervisors 
with a time period during which they can motivate, develop, and prepare 
employees for promotion. As previously noted, after the requirement is 
eliminated, agencies will use qualification standards to ensure that 
candidates for promotion have demonstrated the ability to perform at 
the next highest grade level. In addition, agencies will utilize their 
performance management systems when considering individuals for 
promotion. Even after the elimination of the TIG requirement, 
supervisors will have some period of time to observe their employees' 
performance before recommending promotion. Supervisors are encouraged 
to motivate, develop, and prepare their employees for promotions, 
without regard to whether the employee is subject to a time in grade 
requirement.

Impact on Payroll Costs

    One agency, a professional organization, several unions, and 
several individuals commented that elimination of the time-in-grade 
restriction would result in increased payroll costs for Federal 
agencies. This comment assumes that elimination of the time-in-grade 
requirement will correlate with an increase in the number promotions, 
thereby increasing payroll costs. Whether such a correlation will occur 
is merely speculative. Moreover, even if such a correlation were to 
occur, because the number of promotions is not the only factor that 
determines payroll costs, an increase in promotions may not lead to a 
rise in overall payroll costs. Payroll costs depend on a variety of 
other factors, including collective bargaining agreements and the 
agency's rate of attrition. Further, agencies are presumed to use sound 
management practices in making promotions, including consideration of 
the financial consequences of their decisions.

E.O. 12866, Regulatory Review

    The Office of Management and Budget has reviewed the final rule in 
accordance with Executive Order 12866.

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.

List of Subjects in 5 CFR Part 300

    Freedom of information, Government employees, Reporting and 
recordkeeping requirements, Selective service system.

Office of Personnel Management.
Michael W. Hager,
Acting Director.

0
Accordingly, OPM is revising 5 CFR part 300 to read as follows:

PART 300--EMPLOYMENT (GENERAL)

0
1. Revise the authority citation for part 300 to read as follows:

    Authority: 5 U.S.C. 552, 3301, 3302; E.O. 10577, 3 CFR, 1954-
1958 Comp., page 218, unless otherwise noted.

[[Page 66160]]

    Secs. 300.101 through 300.104 also issued under 5 U.S.C. 7201, 
7204, 7701; E.O. 11478, 3 CFR, 1966-1970 Comp., page 803.
    Sec. 300.301 also issued under 5 U.S.C. 1104 and 3341.
    Secs. 300.401 through 300.408 also issued under 5 U.S.C. 
1302(c), 2301, and 2302.
    Secs. 300.501 through 300.507 also issued under 5 U.S.C. 
1103(a)(5).

Subpart F--[Removed and Reserved]

0
2. Remove and reserve subpart F, consisting of Sec.  300.601 through 
Sec.  300.606.

 [FR Doc. E8-26559 Filed 11-6-08; 8:45 am]
BILLING CODE 6325-39-P