[Federal Register Volume 74, Number 98 (Friday, May 22, 2009)]
[Rules and Regulations]
[Pages 23937-23938]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12006]



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 Rules and Regulations
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  Federal Register / Vol. 74, No. 98 / Friday, May 22, 2009 / Rules and 
Regulations  

[[Page 23937]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 531 and 550

RIN 3206-AL61


Determining Rate of Basic Pay; Collection by Offset From Indebted 
Government Employees

AGENCY: U.S. Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The U.S. Office of Personnel Management is issuing final 
regulations to conform with provisions of the National Defense 
Authorization Act for Fiscal Year 2008. The final regulations revise 
the rules regarding setting pay for certain employees who move from 
nonappropriated fund instrumentality (NAFI) positions to General 
Schedule positions. Also, the final regulations allow certain NAFIs to 
collect debts owed to them by Federal employees via salary offset and 
allow Federal agencies to collect debts by offsetting salary payments 
of certain NAFI employees.

DATES: The regulations are effective on June 22, 2009.

FOR FURTHER INFORMATION CONTACT: David Barash by telephone at (202) 
606-2858; by fax at (202) 606-0824; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: On August 27, 2008, the U.S. Office of 
Personnel Management (OPM) issued proposed regulations (73 FR 50575) to 
revise the rules regarding setting pay for certain employees who move 
from nonappropriated fund instrumentality (NAFI) positions to General 
Schedule (GS) positions. Also, the regulations proposed to allow 
certain NAFIs to collect debts owed to them by Federal employees via 
salary offset and allow Federal agencies to collect debts by offsetting 
salary payments of certain NAFI employees. OPM issued the proposed 
regulations to conform with sections 652 and 1114 of the National 
Defense Authorization Act for Fiscal Year 2008 (Pub. L. 110-181, 
January 28, 2008), hereafter referred to as ``the Act.'' These sections 
became effective on January 28, 2008. (Note: We issued guidance, 
including examples, as a complement to the changes in law under section 
1114 of the Act regarding pay setting. We encourage agencies and 
employees to review these materials on OPM's Web site at http://www.opm.gov/oca/pay/HTML/NAFI.asp.)
    The 60-day comment period for the proposed regulations ended on 
October 27, 2008. This Federal Register notice addresses the one 
comment we received from an individual.

Comment Applicable to General Schedule Basic Pay Setting

    The individual commented on the proposed revisions to the pay-
setting rules. Proposed 5 CFR 531.216(c) provides that when an employee 
moves voluntarily to a GS position in the Department of Defense (DOD) 
or the United States Coast Guard (USCG) from a NAFI position in DOD or 
USCG, respectively, without a break in service of more than 3 days, the 
agency may set the employee's rate of basic pay above the minimum step 
based on the employee's NAFI highest previous rate (HPR). The agency 
also may use the maximum payable rate rule in Sec.  531.221 based on a 
non-NAFI rate of basic pay if that rule produces a higher rate than 
using the employee's NAFI HPR.
    Under Sec.  531.216(d), when such an employee in DOD or USCG is 
moved involuntarily to a GS position from a NAFI position in DOD or 
USCG, respectively, without a break in service of more than 3 days, the 
employee is entitled to an initial payable rate of basic pay at the 
lowest step rate of the GS grade that is equal to or greater than the 
employee's rate of basic pay in the NAFI position immediately before 
the move.
    The individual expressed concern about the additional costs for 
such pay-setting rules and believed that every move to a GS position 
will result in a pay increase. The individual recommended that OPM 
provide cost data.
    We disagree and are not adopting this recommendation. Because of 
the small number of affected employees and the limited conditions under 
which the pay-setting rules may be applied, the incrementally higher 
cost of setting pay under the revised rules is negligible. In addition, 
a covered NAFI employee would not necessarily receive a pay increase 
when he or she moves voluntarily to a GS position; his or her NAFI HPR 
could equal a GS step rate, for example, or the agency may set the 
employee's pay at any GS step rate below the employee's NAFI HPR or 
non-NAFI maximum payable rate.
    The commenter also recommended that OPM revise the regulations to 
ensure that employees who move to pay banding positions do not receive 
a pay increase. This recommendation is outside of the scope of the 
regulations. The regulations provide the pay-setting rules for NAFI 
employees moving to GS positions, not NAFI employees moving to pay 
banding positions.
    Therefore, we are adopting the proposed rule as final without a 
change.

E.O. 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 531 and 550

    Administrative practice and procedure, Claims, Government 
employees, Law enforcement officers, Wages.

John Berry,
Director, U.S. Office of Personnel Management.

0
Accordingly, OPM amends 5 CFR parts 531 and 550 as follows:

PART 531--PAY UNDER THE GENERAL SCHEDULE

0
1. The authority citation for part 531 is revised to read as follows:

    Authority: 5 U.S.C. 5115, 5307, and 5338; sec. 4 of Public Law 
103-89, 107 Stat. 981; and E.O. 12748, 56 FR 4521, 3 CFR, 1991 
Comp., p. 316; Subpart B also issued under 5 U.S.C. 5303(g), 5305, 
5333, 5334(a) and (b), and 7701(b)(2); Subpart D also issued under 5 
U.S.C. 5335 and 7701(b)(2); Subpart E also issued under 5 U.S.C. 
5336; Subpart F also

[[Page 23938]]

issued under 5 U.S.C. 5304 and 5305; E.O. 12883, 58 FR 63281, 3 CFR, 
1993 Comp., p. 682; and E.O. 13106, 63 FR 68151, 3 CFR, 1998 Comp., 
p. 224.

Subpart B--Determining Rate of Basic Pay

0
2. In Sec.  531.216, paragraphs (a), (c)(1), (c)(2)(i), (c)(2)(ii), 
(d)(1), and (d)(2)(i) are revised to read as follows:


Sec.  531.216  Setting pay when an employee moves from a Department of 
Defense or Coast Guard nonappropriated fund instrumentality.

    (a) General. This section governs the setting of pay for an 
employee who moves to a GS position in the Department of Defense or the 
Coast Guard from a position in a nonappropriated fund instrumentality 
(NAFI) (as described in 5 U.S.C. 2105(c)) of the Department of Defense 
or the Coast Guard, respectively, without a break in service of more 
than 3 days. If an employee moves from a NAFI position to a GS position 
with a break of more than 3 days or moves from a NAFI position in the 
Department of Defense or the Coast Guard to a GS position outside of 
the Department of Defense or the Coast Guard, respectively, the 
employee has no special conversion rights and this section does not 
apply.
* * * * *
    (c) Voluntary move. (1) For a Department of Defense or Coast Guard 
employee who moves voluntarily, without a break in service of more than 
3 days, from a NAFI position in the Department of Defense or the Coast 
Guard to a GS position in the Department of Defense or the Coast Guard, 
respectively, the agency may set the employee's initial payable rate of 
basic pay at the lowest step rate in the highest applicable rate range 
currently in effect for the employee's GS position of record and 
official worksite which equals or exceeds the employee's NAFI highest 
previous rate of pay, or any lower step rate, except as provided in 
paragraph (c)(2) or (3) of this section. The employee's initial payable 
rate of basic pay may not exceed the maximum step rate (step 10).
    (2) * * *
    (i) Compare the NAFI highest previous rate to the highest 
applicable rate range currently in effect in the location where the 
employee was stationed while earning that rate. The highest applicable 
rate range is determined based on the pay schedules that would be 
applicable to the employee's current GS position of record if the 
employee were stationed in that location. Identify the lowest step rate 
in the highest applicable rate range that was equal to or exceeded the 
NAFI highest previous rate. If the NAFI highest previous rate is less 
than the range minimum, identify the minimum step rate (step 1). If the 
NAFI highest previous rate exceeds the range maximum, identify the 
maximum step rate (step 10).
    (ii) Identify the step rate in the highest applicable rate range 
for the employee's current official worksite and position of record 
that corresponds to the step rate derived under paragraph (c)(2)(i) of 
this section. That corresponding rate is the maximum payable rate at 
which the agency may set the employee's pay under this section, except 
as provided by paragraph (c)(3) of this section. The agency may set the 
employee's rate of basic pay at any step rate that does not exceed that 
maximum payable rate.
* * * * *
    (d) Involuntary move. (1) For a Department of Defense or Coast 
Guard employee who is moved involuntarily (as defined in paragraph 
(d)(3) of this section), without a break in service of more than 3 
days, from a NAFI position in the Department of Defense or the Coast 
Guard to a GS position with substantially the same duties in the 
Department of Defense or the Coast Guard, respectively, the employee is 
entitled to an initial payable rate of basic pay at the lowest step 
rate of the grade that is equal to or greater than the employee's rate 
of basic pay in the NAFI position immediately before the move. If the 
employee's former NAFI rate exceeds the range maximum, identify the 
maximum step rate (step 10).
    (2) * * *
    (i) The lowest step rate within the highest applicable rate range 
for the employee's GS position of record and official worksite that 
equals or exceeds the employee's NAFI highest previous rate, or any 
lower step rate (consistent with the method prescribed in paragraphs 
(c)(1) and (2) of this section);
* * * * *

PART 550--PAY ADMINISTRATION (GENERAL)

Subpart K--Collection by Offset From Indebted Government Employees

0
3. The authority citation for subpart K of part 550 continues to read 
as follows:

    Authority: 5 U.S.C. 5514; sec. 8(1) of E.O. 11609; redesignated 
in sec. 2-1 of E.O. 12107.


0
4. In Sec.  550.1103, the definition of agency is revised to read as 
follows:


Sec.  550.1103  Definitions.

* * * * *
    Agency means an executive department or agency; a military 
department; the United States Postal Service; the Postal Regulatory 
Commission; any nonappropriated fund instrumentality described in 5 
U.S.C. 2105(c); the United States Senate; the United States House of 
Representatives; any court, court administrative office, or 
instrumentality in the judicial or legislative branches of the 
Government; or a Government corporation. If an agency under this 
definition is a component of an agency, the broader definition of 
agency may be used in applying the provisions of 5 U.S.C. 5514(b) 
(concerning the authority to prescribe regulations).
* * * * *

[FR Doc. E9-12006 Filed 5-21-09; 8:45 am]
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