Main Federal Pay Schedules and Systems
The General Schedule is the federal government’s main pay system that sets the pay rates for employees in most white-collar positions not at the senior executive or other senior levels. The General Schedule is composed of 15 grades, or salary levels. Each grade includes 10 steps through which employees advance based on satisfactory job performance and length of service. For all GS grades, the waiting periods to be advanced to each higher step (that is, qualifying for a “within-grade increase”) are as follows: 52 calendar weeks to be advanced to steps 2, 3, and 4; 104 calendar weeks to be advanced to steps 5, 6, and 7; and 156 calendar weeks to be advanced to steps 8, 9, and 10 (see 5 CFR 531.405). Performance-based “quality step increases” also are allowed. See Section 4 of this chapter.
Position classification standards, developed by the Office of Personnel Management (OPM), are the legal basis for determining the series and grade—and consequently the pay—for the majority of GS positions. In most cases, a GS employee’s basic pay reflects the pay rate specified for the position’s grade and step in the locality where the worker is employed. Disputes over the classification of a GS position that cannot be resolved within the agency can be referred to OPM by either the employee or the agency. OPM’s decision is final. See Position Classification Appeals in Chapter 10, Section 1.
General Schedule jobs commonly are referred to according to one of the “PATCO” (for professional, administrative, technical, clerical, and other) occupational categories:
Professional—Requires knowledge in a field of science or learning characteristically acquired through education or training pertinent to the specialized field, as distinguished from general education. The work of a professional occupation requires the exercise of discretion, judgment, and personal responsibility for the application of an organized body of knowledge that is constantly studied to make new discoveries and interpretations, and to improve the data, materials and methods.
Administrative—Involves the exercise of analytical ability, judgment, discretion, and personal responsibility, and application of a substantial body of knowledge, principles, concepts, and practices applicable to one or more fields of administration or management. While these positions do not require specialized education majors, they do involve the types of skills (analytical, research, writing, judgment) typically gained through a college level general education or through progressively responsible experience.
Technical—Involves work that is non-routine in nature and is typically associated with, and in support of, a professional or administrative field. Such occupations involve extensive practical knowledge gained through on-the-job experience or specific training less than by college graduation. Work in these occupations may involve substantial elements of the professional or administrative field but require less competence in the field involved.
Clerical—Involves structured work in support of office, business, field, or fiscal operations; duties are performed in accordance with established policies, experience or working knowledge related to the tasks to be performed.
Other—Occupations that do not fall into the above categories.
Supervisors of other GS employees ordinarily are classified at least one grade higher than those employees. However, this does not necessarily mean that supervisors will be paid more than each of their subordinates. Supervisory differentials are paid in some cases to keep the supervisor’s pay ahead (see Supervisory Differentials in Section 4 of this chapter).
Some white-collar employees below the senior levels are under pay banding—also called broad banding—systems. In such systems, several GS grades are combined into one, and the agency has greater leeway in setting starting salaries and increasing pay for various reasons, including for performance (see Pay Banding in Section 5 of this chapter). Pay banding systems are common in “demonstration projects” and other settings where exceptions to standard civil service rules apply (see Chapter 8, Section 7).
Federal Wage System
Blue-collar occupations comprise the trades, crafts, and manual labor (unskilled, semi-skilled, or skilled), including foreman and supervisory positions entailing trade, craft, or laboring experience and knowledge as the paramount requirement.
The pay of the federal government’s blue-collar employees is set as an hourly rate under 5 U.S.C. 5343. The law requires that hourly rates for these Federal Wage System employees—also commonly called wage grade or prevailing rate—be adjusted in accordance with pay rates in local markets. The most common wage system schedule, for most non-supervisory workers, contains 15 grades. Each of the grades includes five steps, set at 4 percent increments.
If the employee’s performance is above unacceptable, advancement to the second step occurs after six months of employment, advancement to the third after an additional 18 months, to the fourth after an additional two years, and to the fifth after an additional two years.
Occupations often cover more than one grade level, and many occupations typically are represented at each grade. Differences in rates of pay among wage areas reflect the fact that the prevailing cost of labor varies by region.
The wage system’s prevailing rate determinations are made on the basis of surveys by a “lead agency”—the agency with the most blue-collar employees in an area, most commonly the Defense Department—of rates paid by private employers in each local wage area for work similar to that performed by federal wage employees. Wage schedule adjustments have been capped for many years through the budget process (since 2004, at the local General Schedule pay increase, including both across the board and locality pay adjustments; previously at the GS national average increase, including both components). Wage schedules are adjusted at different times of the year according to when the local lead agency conducts the annual wage survey in each individual wage area.
U.S. Postal Service
As an independent establishment, the U.S. Postal Service operates its own pay system that has two main salary structures plus additional specialized structures. The two main structures are the PS (Postal Service) structure, which covers bargaining unit personnel, such as most clerks and carriers, mail handlers, nurses and security personnel; and the EAS (Executive and Administrative Schedule) structure, which covers executives, professionals, supervisors, postmasters, technical and administrative employees, and other workers not covered by bargaining agreements. See Chapter 12, Section 3.
Executive Schedule, Congressional, and Judicial Pay
Salary levels of certain top officials of all three branches of government are linked. The Executive Schedule, which governs the pay of Cabinet officers and other top federal executives—almost all of them political appointees—is the basic underlying structure. It includes five levels which are, in descending order:
• Level I, Cabinet-Level officials;
• Level II, deputy secretaries of departments, secretaries of military departments, and heads of major agencies;
• Level III, undersecretaries of departments and heads of middle-level agencies;
• Level IV, assistant secretaries and general counsels of departments, heads of smaller agencies, members of certain boards and commissions; and
• Level V, administrators, commissioners, directors, and members of boards, commissions, or units of agencies.
Executive Schedule rates are used to establish certain salary limits for General Schedule employees, the Senior Executive Service, employees in senior-level and senior scientific and technical jobs, administrative law judges, and certain other highly paid positions. See the pertinent topics in this section.
The Ethics Reform Act of 1989 provided for an annual salary adjustment for leaders and members of the Senate and House of Representatives, the Vice President, individuals in positions on the Executive Schedule, and federal justices and judges. The adjustment is based on the percentage change in the wages and salaries (not seasonally adjusted) for the private industry workers element of the employment cost index (ECI), minus 0.5 percent, using the December indicator. It becomes effective at the same time as, and at a rate no greater than, the annual basic pay rate adjustment (that is, the across-the-board component only and not counting the locality pay component) for federal employees under the General Schedule. The adjustment cannot, however, be less than zero or greater than 5 percent. While the Ethics Reform Act sets the rate of the judicial pay adjustment, salary increases for justices and judges must be enacted separately.
While judicial raises require an annual authorization, the congressional and Executive Schedule pay raises are automatic unless Congress acts to prevent them—which has happened in most recent years. Although refusals to accept the raise primarily occur because of sensitivity over congressional pay, the linkage often has caused salaries of judges and Executive Schedule officials to be frozen as well. (Note: While Executive Schedule rates for salary cap purposes have increased in recent years, the actual rates payable to political appointees paid under the Executive Schedule have remained frozen at 2013 levels; the same has applied to the Vice President’s salary rate, which determines the cap on total compensation (see Aggregate Limit on Compensation in Section 2 of this chapter). Pay for members of Congress also has remained frozen, but pay for judges has increased.) The President’s salary is set by law, 3 U.S.C. 102, at $400,000 and cannot be changed during an incumbent’s term.
Senior Executive Service
The Senior Executive Service (SES) is a cadre of high-level supervisors, about nine-tenths of them career employees, the rest politically appointed or on temporary assignments. The SES pay system (see 5 U.S.C. 53 Subchapter VIII) features a pay range with a minimum rate of basic pay starting at 120 percent of the rate for grade 15, step 1, of the base General Schedule (not including locality pay). Agencies that demonstrate that their executive appraisal systems make “meaningful distinctions based on relative performance,” as certified by the Office of Personnel Management with concurrence by the Office of Management and Budget, may pay up to Level II of the Executive Schedule. Most agencies have that certification; for those that don’t, the cap is Level III of the Executive Schedule. SES employees are guaranteed not to suffer a reduction in pay if they transfer to an SES position in another agency where salaries are capped at the lower amount, if their salaries were above that level while at an agency eligible for the higher amount. Under Executive Order 13714 of 2015, an SES member generally must be paid more than any of General Schedule direct-report subordinates, including their locality pay but not including other forms of compensation such as recruitment or retention incentives.
SES members in an agency with a certified executive performance appraisal system also are subject to a higher aggregate compensation limit (that is, basic salary, plus performance bonus for career SES members, and other allowances and incentives) equivalent to the salary rate of the Vice President. Absent certification, the maximum is the rate for Level I of the Executive Schedule. See Aggregate Limit on Compensation in Section 2 of this chapter for details of the certification procedure and what forms of compensation are counted toward the total compensation cap.
SES members do not receive annual across-the-board or locality pay adjustments. Pay adjustments for SES members are based on the employee’s individual performance and/or contribution to the agency’s performance. See Chapter 8, Section 9.
SES members paid at a rate of basic pay equal to or greater than 86.5 percent of the rate for Level II are subject to certain additional post-employment restrictions. See Post-employment Restrictions in Chapter 10, Section 5.
Other High-Level Systems
Administrative Law Judges—ALJs hear and rule on disputes involving economic regulations, enforcement of actions brought by federal agencies against individuals or organizations, and claims for benefits. The large majority work at the Social Security Administration. While they are career federal employees, they operate under a system designed to protect their decisional independence from undue agency influence. See Special Recruitment, Hiring and Placement Programs in Chapter 8, Section 1 for policies on hiring.
The ALJ pay system consists of three levels, in descending order AL-1, -2 and -3; level 3 in turn is divided into six rates, A-F. ALJ positions are placed at levels AL-2 and AL-1 when they involve significant administrative and managerial responsibilities. The minimum rate for ALJ positions is 65 percent of Level IV of the Executive Schedule, and the maximum, including locality adjustments, is Level III.
An ALJ who is appointed and placed in level AL-3 must be paid at the minimum rate A, unless the ALJ is eligible for a higher rate, not to exceed the maximum rate F, because of