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By: FEDweek StaffFollowing is a series of memos from OPM addressing considerations regarding the January pay raise for GS, wage grade and special rate federal employees, as well as for political appointees.
January 2022 Pay Adjustments
The President has signed an Executive order to implement the January 2022 pay adjustments. (See Attachment 1.) Pursuant to the President’s alternative plan issued under 5 U.S.C. 5303(b) and 5304a on August 27, 2021, the Executive order authorizes a 2.2 percent across-the-board increase for statutory pay systems and locality pay increases costing approximately 0.5 percent of basic payroll, reflecting an overall average pay increase of 2.7 percent. This memorandum reviews relevant portions of the Executive order.
The pay adjustment guidance in this memorandum does not apply to senior political officials that have been covered by a pay freeze. We will issue separate guidance regarding whether this pay freeze will be continued or terminated.
New 2022 Salary Tables and Effective Date
We have posted the new 2022 salary tables on OPM’s website. The 2022 pay schedules are effective the first day of the first applicable pay period beginning on or after January 1, 2022 (January 2, 2022, based on the standard biweekly payroll cycle).
The General Schedule and Other Statutory Pay Systems
The Executive order provides an across-the-board increase of 2.2 percent in the rates of basic pay for the statutory pay systems––the General Schedule (GS), the Foreign Service schedule, and certain schedules for the Veterans Health Administration of the U.S. Department of Veterans Affairs. Special base rates for law enforcement officers at GS grades 3 through 10 are also increased by 2.2 percent. (These law enforcement officers are assigned the “GL” pay plan code.)
Executive Schedule
Under 5 U.S.C. 5318, the official Executive Schedule (EX) rates of pay are increased by 2.2 percent (rounded to the nearest $100). The official EX salary table is available on OPM’s website. The official EX rates of pay are used in establishing pay limitations for employees and pay systems unaffected by any pay freeze for certain senior political officials.
Senior Executive Service
Under 5 U.S.C. 5382, the minimum rate of basic pay for the Senior Executive Service (SES) rate range is adjusted to be consistent with the increase in the minimum rate of basic pay for senior-level positions under 5 U.S.C. 5376 ($135,468 in 2022). The applicable maximum rate of basic pay for the SES is $203,700 (EX-II) for SES members covered by an SES performance appraisal system certified pursuant to 5 U.S.C. 5307(d) and $187,300 (EX-III) for SES members covered by an SES performance appraisal system that has not been certified. An SES member with a pay rate below the minimum rate of the new SES rate range must receive a pay increase effective January 2, 2022, that brings the SES member’s rate to at least the new minimum rate because an SES member may not receive less than the minimum rate of the SES rate range.
Other SES pay adjustments must generally be made based on individual performance, contribution to the agency’s performance, or both, as determined under a rigorous performance management system, pursuant to 5 U.S.C. 5382. An agency’s determination to adjust the rate of basic pay for an SES member that is approved by the end of the first pay period in January 2022 (January 15, 2022) may be made effective as of the first day of that first pay period (January 2, 2022). Determinations to adjust SES pay that are approved after January 15, 2022, will become effective at the beginning of the next pay period following the approval. OPM’s regulations for setting and adjusting SES pay are available at 5 CFR part 534, subpart D.
Senior-Level and Scientific and Professional Positions
The minimum rate of basic pay for the senior-level (SL) and scientific and professional (ST) rate range is increased by 2.2 percent, which is the amount of the base GS increase, and is $135,468 in 2022. An SL or ST employee with a pay rate below the minimum rate of the new SL/ST rate range must receive a pay increase effective January 2, 2022, that brings the employee’s rate to at least the new minimum rate because an SL or ST employee may not receive less than the minimum rate of the SL/ST rate range. The applicable maximum rate of basic pay is $203,700 (EX-II) for SL or ST employees covered by a certified SL/ST performance appraisal system and $187,300 (EX-III) for SL or ST employees covered by an SL/ST performance appraisal system that has not been certified.
As provided in 5 U.S.C. 5376(b)(2) and 5 CFR 534.507(a)(1), effective at the beginning of the first applicable pay period commencing on or after the first day of the month in which an adjustment takes effect under 5 U.S.C. 5303 in the rates of basic pay under the General Schedule, the head of an agency must adjust an SL/ST employee’s rate of basic pay by an amount the agency head considers appropriate (including a zero adjustment), subject to the regulations in 5 CFR 534.507, and the agency’s written procedures. Therefore, each agency must make an appropriate adjustment in each SL/ST employee’s rate of basic pay because the General Schedule is being adjusted the first day of the first pay period beginning on or after January 1, 2022. The adjustment of an SL/ST employee’s pay rate under 5 CFR 534.507(a)(1) must be made effective on the first day of the first pay period beginning on or after January 1, 2022 (January 2, 2022, based on the standard biweekly payroll cycle).
Post-Employment Restrictions
Agencies are required to notify SES members, SL and ST employees, and other individuals who are paid at a rate of basic pay equal to or greater than 86.5 percent of the rate for EX-II ($203,700 x 86.5 percent = $176,201 in 2022) that they are subject to certain post-employment restrictions in 18 U.S.C. 207(c)(2)(A)(ii). OPM’s regulations requiring notification of post-employment restrictions are available at 5 CFR part 730. Agencies may continue to use the sample notice OPM provided in its memorandum of January 6, 2004 (CPM 2004-01), to notify SES members, SL or ST employees, or other individuals that they are subject to the post-employment restrictions in 18 U.S.C. 207(c). (Agencies will need to update the pay system, salary threshold, and effective date, as appropriate.) View the sample notice.
Aggregate Limitation on Pay
The aggregate limitation on pay for calendar year 2022 is $226,300 (equivalent to the rate for EX-I). SES members and employees in SL/ST positions who are covered by a certified performance appraisal system are subject to a higher aggregate limitation on pay of the Vice President’s salary ($261,400 in 2022). (See 5 U.S.C. 5307 and 5 CFR part 530, subpart B.)
Administrative Law Judges
The Executive order reflects a decision by the President to increase the rates of basic pay for administrative law judges (ALJs) by 2.2 percent, rounded to the nearest $100. The rate of basic pay for AL-1 is $176,300 (equivalent to the rate for EX-IV). The rate of basic pay for AL-2 is $171,900. The rates of basic pay for AL-3/A through 3/F range from $117,600 to $162,900. The new ALJ salary table is available on OPM’s website.
Administrative Appeals Judges
Under 5 U.S.C. 5372b, the rates of basic pay for administrative appeals judge (AAJ) positions must be set at a rate not less than the minimum rate of basic pay for level AL-3 and not more than the maximum rate of basic pay for level AL-3 of the ALJ pay system established under 5 U.S.C. 5372. At 5 CFR 534.603, OPM’s regulations link the structure of the AAJ pay system directly to the structure for level AL-3 of the ALJ pay system. The AAJ pay system includes six rates of basic pay—AA-1, 2, 3, 4, 5, and 6. These rates correspond to the rates of basic pay for AL-3/A, B, C, D, E, and F of the ALJ pay system. The new AAJ salary table is available on OPM’s website.
Locality Payments
The President’s Executive order reflects the amounts of the new locality payments for GS employees. Attachment 2 provides a table showing the 2022 locality pay percentage and total percentage increase in each locality pay area (reflecting the combined effect of the 2.2 percent across-the-board increase and the applicable increase in the locality pay percentage). Attachment 3 provides a chart showing an example of how the 2022 locality rate and total increase are computed for an employee in the Rest of U.S. locality pay area. GS locality rates are limited to the rate for EX-IV. (See 5 U.S.C. 5304(g)(1) and the “Executive Schedule” section, above.) The 2022 locality pay tables for the General Schedule are available on OPM’s website. Locality pay area definitions are available on OPM’s website.
Locality Pay Extensions
On November 30, 2021, OPM issued a memorandum on behalf of the President’s Pay Agent (the Secretary of Labor and the Directors of the U.S. Office of Management and Budget and OPM) that continues GS locality payments for ALJs and certain other non-GS employee categories in 2022. The memo is available on OPM’s website.
Cost-of-Living Allowance Rates for Nonforeign Areas
As provided under the Nonforeign Area Retirement Equity Assurance Act of 2009 (subtitle B of title XIX of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84, October 28, 2009)), employees in nonforeign areas entitled to cost-of-living allowances (COLAs) have corresponding reductions in their COLAs when locality rates increase. The locality and COLA rates in each COLA area are available on OPM’s website.
Special Rates
We are issuing a separate memorandum announcing the results of OPM’s annual review of special rates and the 2022 special rate adjustments.
Prevailing Rate Pay Adjustments
We are issuing a separate memorandum on pay adjustments for certain prevailing rate (wage) employees.
2022 Premium Pay Caps
Under 5 U.S.C. 5547(a) and 5 CFR 550.105, GS and other covered employees may receive certain types of premium pay in a biweekly pay period only to the extent that the sum of basic pay and such premium pay for the pay period does not exceed the greater of the biweekly rate payable for (1) GS-15, step 10 (including any applicable locality payment or special rate supplement), or (2) the rate payable for EX-V ($165,300 in 2022). In certain emergency or mission-critical situations, an agency may apply an annual premium pay cap instead of a biweekly premium pay cap, subject to the conditions prescribed in law and regulation. (See 5 U.S.C. 5547(b) and 5 CFR 550.106–550.107.) We have posted the 2022 biweekly premium pay caps fact sheet on OPM’s website.
Adjusting Retained Rates
Certain employees are entitled to retained rates above the applicable rate range under 5 U.S.C. 5363 and 5 CFR part 536. As provided in 5 U.S.C. 5363(b)(2)(B) and 5 CFR 536.305, when the maximum rate of the highest applicable rate range for an employee’s position of record is increased while the employee is receiving a retained rate, the employee is entitled to 50 percent of the amount of the increase in that maximum rate. An example of adjusting a retained rate can be found in the fact sheet on OPM’s website.
Fiscal Year 2022 Prevailing Rate Pay Adjustments
The Consolidated Appropriations Act, 2021, contained provisions affecting the determination of pay adjustments for certain prevailing rate (wage) employees. The Further Continuing Appropriations Act, 2022, extends into FY 2022 the provisions of the FY 2021 Act.
As extended, section 737(a) provides that pay increases for certain prevailing rate employees in FY 2022 may not exceed 2.9 percent—the sum of the January 2022 General Schedule (GS) across-the-board percentage adjustment and the difference between the overall average percentage locality payments for GS employees in FY 2021 and FY 2022. Section 737(b) provides that, notwithstanding section 737(a), pay adjustments for certain prevailing rate employees in FY 2022 may not be less than the January 2022 pay adjustments received by GS employees where they work. Section 737(a) applies to wage employees covered by 5 U.S.C. 5342(a)(2) or 5348. Section 737(b) applies to wage employees covered by 5 U.S.C. 5344 or 5348. Sections 737(a) and 737(b) do not apply to wage employees who negotiate their pay under section 9(b) of Public Law 92-392.
Lead agencies must establish wage rates for affected prevailing rate employees for FY 2022 by determining the maximum rates applicable under the pay limitation provisions of section 737(a), determining the minimum pay increase applicable under section 737(b), and then applying the higher of the rates to affected prevailing rate wage schedules. In some wage areas, wage schedule adjustments under the minimum increase provisions of section 737(b)will be higher than under the maximum increase provisions of section 737(a). In addition, as a result of section 737(b), certain prevailing rate wage areas will have more than one wage schedule in effect during FY 2022.
Determining Rates Under Section 737(a)
Section 737(a) provides that pay increases for wage employees in FY 2022 may not exceed 2.9 percent—the sum of the GS across-the-board percentage adjustment and the difference between the overall average percentage locality payments for GS employees in FY 2021 and FY 2022. If any rate exceeds the rate payable on September 30, 2021, by more than 2.9 percent (after rounding), that rate must be reduced to the highest rate that does not exceed 2.9 percent. If the annual wage survey of private sector rates in a given wage area indicates an adjustment of less than 2.9 percent is warranted under section 737(a), the lower prevailing rate will be payable under that section.
Wage schedules issued pursuant to a wage survey under the authority of 5 U.S.C. 5343 are subject to the limitation in section 737(a). The limitation also applies to wage schedules produced by reference to schedules adjusted pursuant to wage surveys and to wage schedules that have been temporarily set aside from certain provisions of the Federal Wage System (FWS) pending study by the Federal Prevailing Rate Advisory Committee. The adjustment of a wage rate required pursuant to a change in an applicable Federal, State, or local minimum wage rate is not subject to the limitation in section 737(a). Rates established as the result of an adjustment in an applicable Federal, State, or local minimum wage rate will be the basis for determining the limitation on subsequent adjustments indicated by an annual prevailing rate wage survey.
Determining Rates Under Section 737(b)
Section 737(b) provides that adjustments in basic pay that take place in FY 2022 under 5 U.S.C. 5344 and 5348 may not be less than the percentage adjustments under 5 U.S.C. 5303 and 5304 received by GS employees in the same location in January 2022.
The geographic boundaries of appropriated and nonappropriated fund prevailing rate wage areas and of GS locality pay areas are not the same. Consequently, section 737(b) requires that certain prevailing rate wage areas have more than one wage schedule in effect during FY 2022. Although a majority of prevailing rate wage areas coincide only with part of the Rest of U.S. (RUS) GS locality pay area, many prevailing rate wage areas coincide with parts of more than one GS locality pay area.
In each situation where the boundary of a prevailing rate wage area coincides with the boundary of a single GS locality pay area boundary, the lead agency for that wage area must establish one wage schedule applicable in the wage area. For example, the Cascade, MT, nonappropriated fund FWS wage area coincides with part of the RUS GS locality pay area. In this example, the minimum prevailing rate adjustment for the Cascade wage area is the same as the RUS GS locality pay area adjustment, 2.42 percent.
In each situation where a prevailing rate wage area coincides with part of more than one GS locality pay area, the lead agency for that wage area must establish more than one prevailing rate wage schedule for that wage area. For example, the boundaries of the Philadelphia, PA, appropriated fund FWS wage area coincide with parts of two different GS locality pay areas—New York-Newark, NY-NJ-CT-PA and Philadelphia-Reading-Camden, PA-NJ-DE-MD. In this example, the lead agency for the Philadelphia wage area must establish two separate wage schedules for use during FY 2022 in the Philadelphia FWS wage area. In the part of the Philadelphia wage area that coincides with the New York-Newark, NY-NJ-CT GS locality pay area, the minimum prevailing rate adjustment is 3.02 percent and in the part coinciding with the Philadelphia-Reading-Camden, PA-NJ-DE-MD GS locality pay area, the minimum prevailing rate adjustment is 2.94 percent.
Prevailing rate employees in overseas locations described in 5 U.S.C. 5343(a)(5) also must receive increases at least equal to the increases received by GS employees in the RUS GS locality pay area.
Prevailing rate adjustments under section 737(b) must be rounded upwards when necessary so that such adjustments are not less than the relevant GS percentage adjustments that occur in January 2022.
Effective Date of Retroactive Pay Adjustments
The wage rates on certain FY 2022 wage schedules are effective retroactively to the normal effective date prescribed on the wage schedule by the lead agency. This uniform date is fixed for all agencies using a wage schedule. For example, the wage schedule for the Washington, DC, FWS wage area has a normal effective date in FY 2022 of October 10, 2021. Employees paid from this wage schedule, for example, are entitled to pay adjustments retroactive to October 10, 2021. For wage areas with normal effective dates later in the fiscal year, retroactive adjustments will not be required. For example, wage schedules for the Savannah, GA, FWS wage area will have a normal effective date in FY 2022 of July 31, 2022. Employees stationed in this wage area will see their wage schedule adjusted prospectively on July 31, 2022.
2021 Annual Review of Special Rates (Results)
The U.S. Office of Personnel Management (OPM) conducts an annual review of special rates established under 5 U.S.C. 5305 to determine the disposition of special rate schedules when General Schedule (GS) pay is adjusted under 5 U.S.C. 5303. Based on OPM’s annual review, special rate tables may be terminated, decreased, or increased. (See OPM’s October 5, 2021, data call memorandum (CPM 2021-20) for further information.)
Agencies were informed in the October 2021 data call memorandum that the default January 2022 adjustment for special rates would be equal to the January 2022 across-the-board adjustment for GS base rates. That memorandum also noted that the across-the-board adjustment for GS base rates would be 2.2 percent, as specified in the President’s alternative plan for January 2022 pay adjustments.
Further, pursuant to OPM’s instructions, each agency conducted a review of its special rate schedules. No agency requested a January 2022 adjustment for special rates different from the default amount. Accordingly, based on the 2021 annual review of special rates, I have determined that the January 2022 adjustment for existing special rates will be 2.2 percent. The effective date for January 2022 pay adjustments is the first day of the first applicable pay period beginning on or after January 1, 2022 (January 2, 2022, based on the standard biweekly payroll cycle).
Please note that agencies having existing or likely staffing problems can submit special rate requests any time throughout a calendar year. Information on how agencies can make special rate requests is posted on the OPM website at https://apps.opm.gov/SpecialRates/srsrequest.aspx. Additional information regarding the 2021 annual review and January 2022 special rates is provided below.
Special Rates in Nonforeign Areas
For the 2021 Annual Review, we reminded agencies of the results of our analysis of special rates in nonforeign areas during the 2012 annual review, and that special rates in nonforeign areas would be reexamined yearly as part of our overall annual review of special rates. During the 2021 Annual Review, no agencies requested termination of special rates or a pay adjustment different from the base GS increase for positions in nonforeign areas. Accordingly, special rates in nonforeign areas will receive the 2.2-percent increase. Also, special rate tables currently receiving Nonforeign Area Retirement Equity Assurance Act of 2009 (NAREAA) additional adjustments will receive the NAREAA additional adjustments shown in Attachment 1.
Capped Special Rates
Under 5 U.S.C. 5305(a)(1), the maximum special rate is the rate payable for level IV of the Executive Schedule (EX-IV), which is $176,300 in 2022. Some special rates for 2022 are capped at that EX-IV rate. Attachment 2 lists capped special rates by table, grade, and step.
Terminated Special Rates
Special rates are terminated based on OPM’s annual review of special rates when covered agencies report to OPM that applicable special rates are no longer necessary or when GS locality rates of pay exceed special rates at the same grade and step due to increases in locality pay. (Under 5 U.S.C. 5305(h), an employee’s entitlement to a special rate ends if the employee is entitled to a higher rate of basic pay, such as a locality rate of pay under 5 U.S.C. 5304.)
No agencies reported to OPM in response to the annual review that any special rate tables would no longer be necessary in 2022. However, some special rates will terminate effective January 2, 2022 due to higher applicable locality rates of pay.
Five special rate tables will terminate effective January 2, 2022, because higher locality rates apply at all steps of each covered grade due to January 2022 increases in locality pay percentages. Those five special rate tables are Tables 0139, 0140, 0256, 0346, and 0377.
In addition, some special rate tables that will not entirely terminate will have one or more pay rates that terminate because applicable 2022 locality rates of pay are higher due to January 2022 increases in locality pay percentages. In such cases, the special rate tables will not show a special rate at affected grades and steps because higher locality pay rates apply. Also, for some special rate tables that cover multiple locations, certain locations will be removed from coverage because the 2022 locality rates in those locations are higher than the special rates at all grades and steps. Termination of special rates in these situations will not result in a loss of pay for covered employees because they will receive a higher locality rate of pay.
Continued Pay Freeze for Certain Senior Political Officials
Under a provision in the Further Continuing Appropriations Act, 2022 (Public Law 117-70, December 3, 2021), the pay freeze for certain senior political officials will continue into calendar year 2022 and through February 18, 2022 (unless an earlier end date is established by subsequent law). Future Congressional action will determine whether the pay freeze continues beyond that date.
The pay freeze applies to the payable rates for covered senior political officials. The freeze does not affect the official rates for the Vice President and the Executive Schedule, which are adjusted under normally applicable law without regard to the pay freeze. While not payable to freeze-covered officials, those official rates continue to be used in establishing pay limitations for employees not covered by the pay freeze. In January 2022, the official rates for the Vice President and the Executive Schedule will be increased by 2.2 percent.
The detailed guidance attached to this memorandum provides information on the employees covered by the pay freeze, the rates of pay affected, and exceptions to the pay freeze.
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