[Federal Register Volume 85, Number 195 (Wednesday, October 7, 2020)]
[Rules and Regulations]
[Pages 63189-63191]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-19498]



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 Rules and Regulations
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 This section of the FEDERAL REGISTER contains regulatory documents 
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  Federal Register / Vol. 85, No. 195 / Wednesday, October 7, 2020 / 
Rules and Regulations  

[[Page 63189]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 302

RIN 3206-AN30


Employment in the Excepted Service

AGENCY: Office of Personnel Management.

ACTION: Final rule.

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

SUMMARY: The Office of Personnel Management (OPM) is issuing final 
regulations governing employment in the excepted service. The rules 
will clarify the existing policy on exemptions from excepted service 
selection procedures and provide additional procedures for passing over 
a preference eligible veteran. The intended effect of these changes is 
to align the regulations with binding case law and thus strengthen the 
application of veterans' entitlements in the excepted service.

DATES: The final rule is effective November 6, 2020.

FOR FURTHER INFORMATION CONTACT: Katika Floyd by telephone at (202) 
606-0960; by email at [email protected]; by fax at (202) 606-2329; or by 
TTY at (202) 418-3134.

SUPPLEMENTARY INFORMATION: On November 30, 2016 the Office of Personnel 
Management (OPM) issued a proposed rule (81 FR 86290) to clarify the 
existing policy on exemptions from excepted service selection 
procedures and provide additional procedures for passing over a 
preference eligible veteran in accordance with binding case law.
    During the 60-day comment period between November 30, 2016, and 
January 30, 2017, OPM received three sets of comments, of which two 
were from individuals and one was from a Federal Agency.
    Two individuals provided comments that were beyond the scope of the 
proposed rule. As summarized below, OPM is not adopting these comments:
     One individual suggested that OPM develop a new excepted 
service Schedule for positions in Schedules A and B in which the 
procedures of 5 CFR part 302 are required; all excepted service 
positions not listed by OPM would presumptively be exempt from part 
302's appointment procedures. OPM is not adopting this comment because 
the current regulatory structure, in which exemptions are specifically 
listed, is more in keeping with the general rules for excepted service 
hiring in 5 U.S.C. 3320.
     One individual suggested OPM include a cross-reference to 
5 CFR part 302 procedures in the listing of Schedule A and B 
authorities required by 5 CFR part 213. Another individual suggested 
that the annual Federal Register notice of the consolidated listing of 
Schedules A, B, and C exceptions include information about whether the 
individual positions are exempt from 302 procedures. OPM is not 
adopting this comment. The notice requirements in 5 CFR 213.103 are 
unrelated to appointment procedures. The purpose of those requirements, 
promulgated pursuant to Civil Service Rule VI, 5 CFR 6.1, is to inform 
the public and agencies of OPM's decision granting the excepted 
appointing authority.
     One individual requested that OPM clarify the provisions 
for conversion to the competitive service of employees serving on 
Pathways appointments and Veterans Recruitment Appointments. OPM is not 
adopting this comment because the provisions for conversion in 5 CFR 
part 307 and part 362 are a separate matter, and, in any event, we 
believe that they are sufficiently clear.
     One individual suggested that OPM revise 5 CFR part 302 to 
include Alternative Rating and Selection Procedures (i.e., category 
rating). We note that a change to this provision was not included in 
the proposed rule that OPM published in 2016. Moreover, it is not 
necessary for OPM to adopt this comment, because agencies already have 
the option, under Sec.  302.105, of adopting category rating-like 
selection procedures, as long as those procedures provide preference 
eligibles with as much advantage in referral as they would otherwise 
receive under the methods specified in part 302. OPM will consider 
making this change in conjunction with a future package intended to 
address intervening statutory amendments.

Positions Exempt From Appointment Procedures

    One individual suggested that for positions exempt from the 
appointment procedures in part 302, OPM clarify the phrase ``each 
agency must follow the principle of veteran preference as far as 
administratively feasible'' as used in Sec.  302.101(c) or provide 
guidance in light of the Merit System Protection Board (MSPB) case, 
Jarrard v. Social Security Administration, 115 M.S.P.R. 397 (2010), 
aff'd sub nom. Jarrard v. Department of Justice, 669 F.3d 1320 (Fed. 
Cir. 2012). We see no need to amend the rule to explain the meaning of 
this phrase. This standard was discussed at length in Patterson v. 
Department of the Interior, 424 F.3d 1151 (Fed. Cir. 2005), a 
precedential decision in which the U.S. Court of Appeals for the 
Federal Circuit accepted the Government's argument that it was not 
possible to give attorney applicants veterans' preference points under 
5 U.S.C. 3309 because an appropriations law prohibits the use of 
examination and rating in attorney hiring. In that litigation, OPM took 
the position that the phrase ``follow the principle of veteran 
preference as far as administratively feasible'' means that veterans' 
preference must be considered as a positive factor in the selection 
process. See Patterson, 424 F.3d at 1156-57. The Federal Circuit 
sustained OPM's position. Id. at 1159-1160 (``The positive factor test, 
in turn, strikes us as a reasonable way of `follow[ing] the principle 
of veteran preference as far as administratively feasible,' 5 CFR 
302.101(c), in the case of a preference eligible applying for an 
excepted service attorney position.''). This is the test OPM continues 
to regard as appropriate for positions exempted by Sec.  302.101(c). We 
note that this definition had previously been used by the Department of 
Justice, in a 1979 opinion addressing what is required for attorney 
hiring. 3 U.S. Op. Off. Legal Counsel 140, 1979 WL 16553 (O.L.C.), at 
146-147 (``The Department routinely applies the Veterans Preference Act 
in a meaningful fashion to attorney-hiring. . . . That an applicant is 
a preference eligible is weighed as a positive factor in the 
Department's attorney-hiring program, [footnote omitted] . . . . When 
the

[[Page 63190]]

veteran's other qualifications place him or her in close competition, 
the veteran is preferred over other applicants with substantially equal 
qualifications.''). We note one exception. As observed below, if OPM 
determines that part 302's appointment procedures apply to an agency-
specific appointing authority under Sec.  302.101(c)(6), OPM's approval 
of the appointing authority will address the procedures that apply.
    One individual recommended that positions for readers for blind 
employees, interpreters for deaf employees and personal assistants for 
handicapped employees filled under 5 CFR 213.3102(ll) should be exempt 
from the procedures in 5 CFR 302. The commenter noted that employees in 
the reader and assistant positions are used to fill positions that 
support disabled employees who may have been appointed under 5 CFR 
213.3102(u) (which is exempt from 302 procedures), so the reader and 
personal assistant positions should also be exempt. OPM is not adopting 
this recommendation. OPM has no basis or evidence which suggests that 
agencies cannot apply part 302 when filling positions under 5 CFR 
213.3102(ll), or that part 302 would otherwise create significant 
barriers to filling these positions. We note that no agency has 
contacted OPM for an agency-specific exemption for positions filled 
under 5 CFR 213.3102(ll). A key distinction between the two hiring 
authorities is that under 5 CFR 213.3102(u) an applicant can 
demonstrate his or her ability to do the job during a trial period or 
temporary appointment. Such is not the case for positions filled using 
5 CFR 213.3102(ll).
    One individual, commenting on OPM's proposal to amend 5 CFR 
302.101(c)(6), expressed concern that ``OPM with this change is in 
essence requiring 5 CFR 302 competition for positions for which it is 
impractical to examine.'' Section 302.101(c)(6) had stated that 
positions in schedule A of the excepted service were exempt from the 
appointment procedures in part 302 ``when OPM agrees with the agency 
that the positions should be included hereunder.'' OPM proposed 
amending this text to state that positions in schedule A of the 
excepted service are exempt from the appointment procedures in part 302 
when ``OPM agrees with the agency that the positions should be included 
hereunder and states in writing that an agency is not required to fill 
positions according to the procedures in this part.'' As OPM explained 
in the accompanying Federal Register notice, this is a clarification, 
not a substantive change. See 81 FR 86290. The fact that ``it is not 
practicable to examine'' for a position, requiring its placement in 
schedule A of the excepted service, does not automatically make part 
302 inapplicable; but rather, reflects the impracticability of applying 
``the qualification standards and requirements established for the 
competitive service'' when hiring for the position. 5 CFR 213.3101. 
OPM's written approvals of schedule A appointing authorities specify 
whether any of the procedures in part 302 apply.

Applying Veterans Preference

    One agency commented that Sole Survivorship Preference (as defined 
in 5 CFR part 211) needs to be addressed in Sec. Sec.  302.201(b), 
302.303(d), and 302.304(b)(5). OPM agrees and has updated these 
sections in the final rule accordingly.
    This agency also asked OPM to clarify selections under Sec.  
302.401(a) when fewer than three candidates remain in the highest 
preference category. Section 302.401(c) states, in part, ``an agency 
must make its selection from the highest available preference category, 
as long as at least three candidates remain in that group. When fewer 
than three candidates remain in the highest category, consideration may 
be expanded to include the next category.'' In instances in which two 
preference categories are merged, an agency may select any preference 
eligible in the newly merged category. The order of selection is 
described elsewhere in the regulations. Because we believe the text of 
the rule is clear, we are not adopting the comment.

Technical Change Required by a Recently-Enacted Statute

    The August 13, 2018 enactment of Public Law 115-232, the John S. 
McCain National Defense Authorization Act for FY 2019 (NDAA), requires 
a technical amendment. Sections 1107(b)(1)(B) and (d) of the NDAA 
provide that effective on the date when OPM issues a final rule to 
implement section 1107 of the NDAA, subsection (b)(7) of 5 U.S.C. 3319 
will be redesignated as subsection (b)(6).
    OPM has not yet issued a final rule to implement section 1107 of 
the NDAA, but when it does so, the reference to 5 U.S.C. 3319(c)(7) 
will become obsolete. To avoid the need for future technical and 
conforming amendments, this final rule replaces the specific reference 
to 5 U.S.C. 3319(c)(7) with a more general reference to 5 U.S.C. 
3319(c).

Regulatory Review

    Executive Orders 13563 and 12866 direct agencies to assess all 
costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). Executive 
Order 13563 emphasizes the importance of quantifying both costs and 
benefits, of reducing costs, of harmonizing rules, and of promoting 
flexibility. This rule has been designated by OMB as a ``significant 
regulatory action'' but not an ``economically significant'' regulatory 
action as described under Section 3(f)(1) under Executive Order 12866.

Reducing Regulation and Controlling Regulatory Costs

    This rule is not expected to be subject to the requirements of E.O. 
13771 (82 FR 9339, February 3, 2017) because this rule imposes no more 
than de minimis costs.

Regulatory Flexibility Act

    I certify that this regulation will not have a significant impact 
on a substantial number of small entities because it applies only to 
Federal agencies and employees.

Federalism

    This regulation will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this rule does not have sufficient 
federalism implications to warrant preparation of a Federalism 
Assessment.

Civil Justice Reform

    This regulation meets the applicable standard set forth in section 
3(a) and (b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

    This rule will not result in the expenditure by State, local or 
tribal governments of more than $100 million annually. Thus, no written 
assessment of unfunded mandates is required.

Congressional Review Act

    This action is subject to the CRA, 5 U.S.C. 801 et seq., and OPM 
will submit a rule report to each House of the Congress and to the 
Comptroller General

[[Page 63191]]

of the United States. This action is a not ``major rule'' as defined by 
5 U.S.C. 804(2).

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    This final regulatory action will not impose any additional 
reporting or recordkeeping requirements under the Paperwork Reduction 
Act.

List of Subjects in 5 CFR Part 302

    Government employees.

Office of Personnel Management.
Alexys Stanley,
Regulatory Affairs Analyst.

    Accordingly, OPM is amending 5 CFR part 302 as follows:

PART 302--EMPLOYMENT IN THE EXCEPTED SERVICE

0
1. The authority citation for part 302 continues to read as follows:

    Authority: 5 U.S.C. 1302, 3301, 3302, 3317, 3318, 3319, 3320, 
8151, E.O. 10577 (3 CFR 1954-1958 Comp., p. 218); Sec.  302.105 also 
issued under 5 U.S.C. 1104, Pub. L. 95-454, sec. 3(5); Sec.  302.501 
also issued under 5 U.S.C. 7701 et seq.

0
2. Amend Sec.  302.101 by revising paragraph (c)(6) and adding 
paragraph (c)(11) to read as follows:


Sec.  302.101  Positions covered by regulations.

* * * * *
    (c) * * *
    (6) Positions included in Schedule A (see subpart C of part 213 of 
this chapter) for which OPM agrees with the agency that the positions 
should be included hereunder and states in writing that an agency is 
not required to fill positions according to the procedures in this 
part.
* * * * *
    (11) Appointment of persons with intellectual disabilities, severe 
physical disabilities, or psychiatric disabilities to positions filled 
under 5 CFR 213.3102(u).

0
3. Amend Sec.  302.201 by revising paragraph (b) to read as follows:


Sec.  302.201  Persons entitled to veteran preference.

* * * * *
    (b) When eligible candidates are referred without ranking, the 
agency shall note preference as ``CP'' for preference eligibles under 5 
U.S.C. 2108(3)(C), as ``XP'' for preference eligibles under 5 U.S.C. 
2108(3)(D) through (G), as ``SSP'' for preference eligibles under 5 
U.S.C. 2108(3)(H) and as ``TP'' for all other preference eligibles 
under that title.

0
4. Amend Sec.  302.303 by revising paragraph (d) to read as follows:


Sec.  302.303  Maintenance of employment lists.

* * * * *
    (d) Order of entry. An agency shall enter the names of all 
applicants rated eligible under Sec.  302.302 on the appropriate list 
(priority reemployment, reemployment, or regular employment) in the 
following order:
    (1) When candidates have been rated only for basic eligibility 
under Sec.  302.302(a). (i) Preference eligibles having a compensable, 
service-connected disability of 10 percent or more (designated as 
``CP'') unless the list will be used to fill professional positions at 
the GS-9 level or above, or equivalent;
    (ii) All other candidates eligible for 10-point veteran preference;
    (iii) All candidates eligible for 5-point veteran preference;
    (iv) All candidates eligible for sole survivorship preference and
    (v) Qualified candidates not eligible for veteran preference.
    (2) When qualified candidates have been assigned numerical scores 
under Sec.  302.302(b). (i) Preference eligibles having a compensable, 
service-connected disability of 10 percent or more, in the order of 
their augmented ratings, unless the list will be used to fill 
professional positions at the GS-9 level or above, or equivalent;
    (ii) All other qualified candidates in the order of their augmented 
ratings. At each score, qualified candidates eligible for 10-point 
preference will be entered first, followed, second, by 5-point 
preference eligibles, third, by sole survivorship preference eligibles, 
and last, by nonpreference eligibles.

0
5. Amend Sec.  302.304 by revising paragraph (b)(5) to read as follows:


Sec.  302.304  Order of consideration.

* * * * *
    (b) * * *
    (5) Unranked order. When numerical scores are not assigned, the 
agency may consider applicants who have received eligible ratings for 
positions not covered by paragraph (b)(4) of this section in either of 
the following orders:
    (i) By preference status. Under this method, preference eligibles 
having a compensable service-connected disability of 10 percent or more 
are considered first, followed, second, by other 10-point preference 
eligibles, third, by 5-point preference eligibles, fourth by sole 
survivorship preference eligibles, and last, by nonpreference 
eligibles. Within each category, applicants from the reemployment list 
will be placed ahead of applicants from the regular employment list.
    (ii) By reemployment/regular list status. Under this method, all 
applicants on the reemployment list are considered before applicants on 
the regular employment list. On each list, preference eligibles having 
a compensable service-connected disability of 10 percent or more are 
considered first, followed, second, by other 10-point preference 
eligibles, third, by 5-point preference eligibles, fourth by sole 
survivorship preference eligibles, and last by nonpreference eligibles.

0
6. Amend Sec.  302.401 by revising paragraph (b) to read as follows:


Sec.  302.401  Selection and appointment.

* * * * *
    (b) Passing over a preference applicant. When an agency, in making 
an appointment as provided in paragraph (a) of this section, passes 
over the name of a preference eligible, it shall follow the procedures 
in 5 U.S.C. 3318(c) and 3319(c) as described in the Delegated Examining 
Operations Handbook. An agency may discontinue consideration of the 
name of a preference eligible for a position as described in 5 U.S.C. 
3318(c).
* * * * *
[FR Doc. 2020-19498 Filed 10-6-20; 8:45 am]
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