[Federal Register Volume 77, Number 113 (Tuesday, June 12, 2012)]
[Proposed Rules]
[Pages 34854-34855]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-14274]


 ========================================================================
 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. 77, No. 113 / Tuesday, June 12, 2012 / 
Proposed Rules  

[[Page 34854]]


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OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 532

RIN 3206-AM63


Prevailing Rate Systems; Special Wage Schedules for 
Nonappropriated Fund Automotive Mechanics

AGENCY: U.S. Office of Personnel Management.

ACTION: Proposed rule with request for comments.

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SUMMARY: The U.S. Office of Personnel Management is issuing a proposed 
rule to establish special wage schedules for the Department of 
Defense's (DOD's) nonappropriated fund (NAF) automotive mechanics. 
These special wage schedules would replace the current commission pay 
practice covering DOD's NAF automotive mechanics with a flat rate pay 
system. Implementation of a flat rate pay system will better align the 
pay practice for compensating NAF automotive mechanics with current 
prevailing pay practices in the private sector.

DATES: We must receive comments on or before August 13, 2012.

ADDRESSES: Send or deliver comments to Jerome D. Mikowicz, Deputy 
Associate Director for Pay and Leave, Employee Services, U.S. Office of 
Personnel Management, Room 7H31, 1900 E Street NW., Washington, DC 
20415-8200; email [email protected]; or FAX: (202) 606-4264.

FOR FURTHER INFORMATION CONTACT: Madeline Gonzalez, (202) 606-2838; 
email [email protected]; or Fax: (202) 606-4264.

SUPPLEMENTARY INFORMATION: The U.S. Office of Personnel Management 
(OPM) is issuing a proposed rule to establish special wage schedules 
for the Department of Defense's (DOD's) approximately 80 
nonappropriated fund (NAF) automotive mechanics. These special wage 
schedules would replace the current commission pay practice covering 
DOD's NAF automotive mechanics with a flat rate pay system. 
Implementation of a flat rate pay system will better align the pay 
practice for compensating NAF automotive mechanics with current 
prevailing pay practices in the private sector.

Background

    Since 1972, OPM (and its predecessor, the Civil Service Commission) 
has been responsible for overseeing the administration of the Federal 
Wage System (FWS), the pay system for the Federal Government's craft, 
trade, and laboring employees. The FWS is designed to provide common 
policies, practices, and job-grading standards for uniform application 
by all Federal agencies. While most FWS employees are paid according to 
their grade level from the regular wage schedule for their wage area, 
certain agency policies and practices, including the NAF pay practice 
for compensating automotive mechanics on a commission rate basis, 
continued as ``set-aside'' pay practices under the FWS. The set-aside 
pay practices were to be frozen in place until they could be reviewed 
by the Federal Prevailing Rate Advisory Committee (FPRAC), the national 
labor-management committee responsible for advising OPM on matters 
concerning the pay of FWS employees. These NAF set-aside pay practices 
are documented in appendix V of the OPM Operating Manual Federal Wage 
System--Nonappropriated Fund. Appendix V provides the schedules, 
employee coverage, basis for rates, evaluation plan, and schedule areas 
applicable under the NAF set-aside schedules.
    DOD has requested that the current commission pay practices 
covering DOD's NAF automotive mechanics be replaced with a flat rate 
pay system. FPRAC reviewed and recommended that we adopt these changes 
by majority vote. These changes would be effective on the first day of 
the first applicable pay period beginning on or after 30 days following 
publication of the final regulations.

Current Commission Pay Plan

    The commission rate special schedules compensate automotive 
mechanics on the basis of a percentage of sales. Under the current 
commission pay plan, management controls the shop labor rate and 
determines the commission percentage. The automotive mechanic's pay is 
directly linked to sales generated. Any fluctuation up or down in the 
shop labor rate impacts the automotive mechanic's earnings.

Proposed Flat Rate Pay Plan

    The proposed flat rate pay plan would not be linked to shop labor 
rates, but would instead take into account local prevailing rates, the 
mechanic's skill level, and the standard number of hours required to 
complete a particular job. Since the change would de-link shop labor 
rates from employee pay rates, it would permit NAF automotive 
businesses to adjust retail rates as needed without having to adjust 
employee pay rates.
    Under the flat rate pay plan, DOD would conduct a special flat rate 
survey of similar jobs in the local area annually. An hourly flat rate 
would be established for each of the covered grades. The flat rate 
would be de-linked from the sale. Fluctuations up or down in the shop 
labor rate would not impact the automotive mechanic's earnings.

Employees Covered

    NAF automotive mechanics who would be changed to a flat rate pay 
system are employees in pay plans NA, NL, and NS, series 5823, grades 8 
through 10, who are currently paid based on commission. Employees 
currently being paid hourly rates would not be moved to the flat rate 
pay system; they will continue to receive hourly rates. No current 
employee will have his or her pay rate reduced as a result of 
implementing these new special schedules.

Effect on Employee Benefits

    The flat rate pay plan would not change how premium pay, paid 
leave, and holidays are paid nor would it change the employee's 
retirement calculation.

FPRAC Oversight

    The automotive mechanics flat rate pay plan would be re-evaluated 
by FPRAC every 3 years, beginning 3 years after OPM issues final 
regulations to implement the special wage schedules for NAF automotive 
mechanics. In preparation for this evaluation, OPM staff would prepare 
a report on the impact of the plan on recruitment, retention, and 
workers' earnings.

[[Page 34855]]

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.

Executive Order 13563 and Executive Order 12866

    This proposed rule has been reviewed by the Office of Management 
and Budget in accordance with Executive Order 13563 and Executive Order 
12866.

List of Subjects in 5 CFR Part 532

    Administrative practice and procedure, Freedom of information, 
Government employees, Reporting and recordkeeping requirements, Wages.

    U.S. Office of Personnel Management.
John Berry,
Director.
    Accordingly, the U.S. Office of Personnel Management is proposing 
to amend 5 CFR part 532 as follows:

PART 532--PREVAILING RATE SYSTEMS

    1. The authority citation for part 532 continues to read as 
follows:

    Authority: 5 U.S.C. 5343, 5346; 532.707 also issued under 5 
U.S.C. 552.

    2. Subpart B is amended by adding Sec.  532.287 to read as follows:


Sec.  532.287  Special wage schedules for nonappropriated fund 
automotive mechanics.

    (a) The Department of Defense (DOD) will establish a flat rate pay 
system for nonappropriated fund (NAF) automotive mechanics. This flat 
rate pay system will take into account local prevailing rates, the 
mechanic's skill level, and the standard number of hours required to 
complete a particular job.
    (b) DOD will issue special wage schedules for NAF automotive 
mechanics who are covered by the flat rate pay system. These special 
schedules will provide rates of pay for nonsupervisory, leader, and 
supervisory employees. These special schedule positions will be 
identified by pay plan codes XW (nonsupervisory), XY (leader), and XZ 
(supervisory), grades 8-10, and will use the Federal Wage System 
occupational code 5823.
    (c) DOD will issue special wage schedules for NAF automotive 
mechanics based on annual special flat rate surveys of similar jobs 
conducted in each special schedule wage area.
    (1) The survey area for these special surveys will include the same 
counties as the regular NAF survey area.
    (2) The survey jobs used will be Automotive Worker and Automotive 
Mechanic.
    (3) The special surveys will include data on automotive mechanics 
that are paid under private industry flat rate pay plans as well as 
those paid by commission.
    (3) In addition to all standard North American Industry 
Classification System (NAICS) codes currently used on the regular 
surveys, the industries surveyed will include--

------------------------------------------------------------------------
         2007 NAICS codes                2007 NAICS industry titles
------------------------------------------------------------------------
441110............................  New Car Dealers.
441310............................  Automotive Parts and Accessory
                                     Stores.
811111............................  General Automotive Repair.
811191............................  Automotive Oil Change and
                                     Lubrication Shops.
------------------------------------------------------------------------

    (4) The surveys will cover establishments with a total employment 
of eight or more.
    (5) The special schedules for NAF automotive mechanics will be 
effective on the same dates as the regular wage schedules in the NAF 
FWS wage area.
    (d) New employees will be hired at step 1 of the position under the 
flat rate pay system. Current employees will be moved to these special 
wage schedules on a step-by-step basis. Pay retention will apply to any 
employee whose rate of basic pay would otherwise be reduced as a result 
of placement in these new special schedules.

[FR Doc. 2012-14274 Filed 6-11-12; 8:45 am]
BILLING CODE 6325-39-P