Part 1: Personnel Systems & Procedures

Chapter 6: Pay, Allowances, and Other Payments

Section 1: Determining Rate of Basic Pay

Par.

1. What is the purpose of this section?
2. Does this directive cancel an existing Federal Highway Administration (FHWA) directive?
3. What are the pertinent references with regard to setting the rate of basic pay?
4. What are the key definitions used in this section?
5. What is the FHWA policy on determining the rate of basic pay upon initial Federal appointment?
6. How is the rate of basic pay determined upon reemployment after a break in service?
7. How is the rate of basic pay set for other actions?
8. How is the rate of basic pay determined based upon the highest previous rate?

1. What is the purpose of this section? The purpose of this section is to issue the procedures for determining the rate of basic compensation to be paid to employees in General Schedule (GS) positions (including positions formerly covered by the Performance Management and Recognition System and designated as GM). In the FHWA, pay-setting practices will be applied consistently and equitably. To this end, employees shall be paid salaries based on guidelines contained in this section.

2. Does this directive cancel an existing Federal Highway Administration (FHWA) directive? Yes. This directive cancels FHWA Personnel Management Manual (PMM) Part 1, Chapter 6, Section 1 (Determining Rate of Basic Pay), dated June 28, 1996.

3. What are the pertinent references with regard to setting the rate of basic pay?

   1. Title 5, United States Code, Sections 5301, 5303, and 5331-5338.

   2. Title 5, Code of Federal Regulations, Parts 530, 531, and 534.

4. What are the key definitions used in this section?

   1. Demotion. A change of an employee from one GS/GM grade to a lower GS/GM grade (with or without a reduction in pay) or from a higher non-GS/GM rate to a lower rate of pay within a GS/GM grade.

   2. Highest previous rate. The highest actual rate of basic pay (before any deductions and exclusive of additional pay of any kind, such as overtime, night, or Sunday differentials, etc.) previously paid to an individual while employed in a position in the Federal Government; or the actual rate of basic pay for the highest grade and step previously held by an individual while employed in a position subject to the General Schedule. Employment must have been under an appointment not limited to 90 days or less, or for a continuous period of not less than 90 days under one or more appointments without a break in service.

   3. New appointment. The first appointment, regardless of tenure, as an employee of the Federal Government or the government of the District of Columbia.

   4. Promotion. A change of an employee from a lower GS/GM grade to a higher GS/GM grade, or from a lower non-GS/GM rate to a higher GS/GM rate.

   5. Reassignment. A change of an employee, while serving continuously in the same Federal agency, from one position to another without promotion or demotion.

   6. Reemployment. Any employment, including reinstatement or another type of appointment, after a break in service of at least one full workday.

   7. Transfer. A change of a Federal Government employee, without a break in service of one full workday, from one branch in the Federal Government to another or from one Federal agency to another.

5. What is the FHWA policy on determining the rate of basic pay upon initial Federal appointment?

   1. Under normal circumstances. Except for cases described in paragraphs 5b and 5c, a new appointment is made at the first step of the grade for GS employees.

   2. Special salary rates. Special rates for recruitment and retention are periodically established for certain groups of positions. These higher rates may be authorized by the Office of Personnel Management (OPM) when the pay rates in private enterprise exceed the normal pay rates for the positions concerned to such a degree as to handicap significantly the Federal Government’s recruitment or retention of well-qualified persons.

   3. Superior qualifications appointments. Superior qualifications appointments, made under specific limited conditions, may be requested in accordance with the guidance set forth in Part 1, Chapter 6, Section 1, Subsection 1, Advanced-in-Hiring Rates Based on Superior Qualifications, when filling positions at a rate above the first step. This authority is designed to attract superior candidates to the Federal Government who otherwise would probably not accept Federal employment due to salary considerations.

6. How is the rate of basic pay determined upon reemployment after a break in service? A person who is reemployed after a break in service is paid a salary based on the currently authorized rate for the grade and step last held prior to separation, unless another rate is established under the FHWA highest previous rate guidelines.

7. How is the rate of basic pay set for other actions? For other pay actions such as transfers, promotions, reassignments, demotions, restoration after military service, changes between pay systems and pay adjustments for supervisors of wage grade employees, the servicing human resources office will assure that the rate of pay for GS employees is based upon OPM regulations and the FHWA highest previous rate guidance contained in paragraph 8.

8. How is the rate of basic pay determined based upon the highest previous rate?

   1. Highest previous rate criteria. It is the general practice of the FHWA to pay the highest previous rate unless specific circumstances exist that are comparable to those described in paragraphs 8c and 8d that indicate the rate is not warranted. The selecting or appointing official, in consultation with the servicing human resources office, determines whether the highest previous rate is warranted as discussed in paragraphs 8c and 8d. At the discretion of the selecting/appointing official, the rate of pay may be set at any step of the grade that is determined to be appropriate, from step one up to and including the step corresponding to the highest previous rate. Each appointing office should ensure consistency and equity among comparable determinations to the extent possible.

   2. Basis for highest previous rate. The highest previous rate must be based on a regular tour of duty under an appointment not limited to 90 days or less, or for a continuous period of not less than 90 days under one or more appointments without a break in service. If the highest previous rate was earned in a GS position and the rates have since been increased by subsequent amendments, the present GS rate for the appropriate grade and step will be the highest previous rate. If the highest previous rate falls between two steps of the grade, the employee may be paid at the higher step.

   3. Highest previous rate determination. A determination will be made in each case as to whether the highest previous rate is warranted based on the circumstances. Depending upon the overall assessment of the situation, including consideration of issues such as consistency and equity, the qualifications of the employee, and the extent of the recruiting needed to fill the position, the following circumstances may warrant less than the highest previous rate:

      • (1) An employee received a rate in a position so different from the position to which the employee will be appointed that there is a question about the experience/qualifications relatedness, e.g., from Information Technology Specialist to Human Resources Specialist.

      • (2) The use of the full highest previous rate would result in poor pay alignment with other FHWA employees assigned similar or identical work within the same duty station, or poor pay alignment with supervisory and management positions.

   4. Circumstances when highest previous rate should not be paid. The highest previous rate should not be paid under the following circumstances:

      • (1) An employee was demoted at his/her own request with the prospect of repromotion back to the former grade within the foreseeable future under merit promotion rules. In such a case, a rate should be selected in the lower grade which upon promotion back will place the employee in the rate in the higher grade which he/she would have attained had he/she remained in that grade. However, a demotion to enter a formal employee development program generally utilized FHWA-wide (e.g., Upward Mobility, Apprenticeship, or Career Intern Programs) is not considered to be “at the employee’s request” regardless of whether merit promotion procedures were utilized. Such an employee shall be paid at the highest previous rate because the demotion is considered to be initiated by management to further the FHWA’s mission.

      • (2) An employee received a rate in a position from which he/she had been removed for inefficiency or disciplinary reasons by reassignment, reduction in grade, or separation. This rate should not be used to determine the highest previous rate.