Par.

1. Purpose

2. References

3. Policy

4. Background

5. Superior Qualifications Determination

6. Advanced Rate Determination

7. Implementation Procedures

8. Evaluation Procedures

1. PURPOSE. To define and set forth the conditions and procedures for authorizing advanced rate determinations based on superior qualifications.

2. REFERENCES

   1. Title 5, United States Code (U.S.C.), Section 5333(a),

   2. Public Law 101-509, Federal Employees Pay Comparability Act of 1990 (FEPCA), Section 101(a) and Section 106,

   3. Title 5, Code of Federal Regulations (CFR), Part 531,

   4. DPM Bulletin 338-9, dated November 5, 1991, Authority to Make Appointments Above Minimum Rates, and

   5. FHWA Delegations and Organization Manual, M 1100.1A, Part I, Chapter 4, Appendix 1-1 and paragraph 121.

3. POLICY

   1. The advanced-in-hiring rate is to be considered for use only if one of the following conditions is met:

      (1) the candidate's existing earnings are in excess of the minimum rate of the grade of the position, and a determination has been made that the position the candidate will fill falls within a pre-established category of positions in which the agency has experienced difficulty in filling; or

      (2) his/her qualifications are unusually high or unique; or

      (3) a special need exists in DOT for his/her services.

   2. The advanced rate should be equivalent to what the candidate currently would receive in non-Federal employment. If this rate falls between two steps of a grade, the candidate shall be paid the higher step. For positions covered by the former Merit Pay system, the pay rate requested should be that of theappropriate step of the applicable General Schedule grade.

4. BACKGROUND

   1. Title 5, U.S.C., Section 5333 authorizes DOT and designated agencies the authority to appoint an individual to a position at a rate above the minimum rate of the appropriate grade based on the superior qualifications of the candidate under specified conditions. The purpose of this delegation is to improve DOT's ability to compete with the private sector for top-quality candidates by being better able to match that person's actual annual earnings. In keeping with this purpose, the Department has delegated this authority to operating administrations, which under the FEPCA provisions allow approvals of appointments above the minimum step of the grade at any grade level.

   2. The FEPCA provisions permit additional flexibilities which in competitive qualifications assessments also allow the agency to best determine its compensatory needs to attract the best candidates within the particular labor markets.

5. SUPERIOR QUALIFICATIONS DETERMINATION. In determining what constitutes the superior candidate, the servicing personnel office should make a realistic assessment of the overall quality of candidates available in the specialty field of the position and the qualities which distinguish the best prospects for the position being filled. The expectation for the superior and uniquely qualified candidate may differ from the well-qualified candidate in readiness, adaptability, exposure, accomplishment and expertise in the absence of comparably qualified candidates.

   1. Factors to consider are:

      (1) whether there is a scarcity of qualified candidates, or the agency has experienced difficulty in filling the job within that locale;

      (2) whether there are many well-qualified candidates, both in experience and education, and under further assessment, which candidate might have an outstanding reputation, have advanced degrees, published articles, have unusual skills, or interdisciplinary training in the specific projects or programs treated by the position;

      (3) whether the specialty is new and emerging where persons with pertinent education or high-level experience do not exist;

      (4) whether the candidate, without advanced degrees or unusual attainments, has been found superior based on his/her ability to perform the needed work; or

      (5) to what degree the qualifications of the candidate are valued within the organization.

   2. Of equal importance, the position for which the candidate is being considered must be shown to merit the needed expertise of the superior or uniquely qualified candidate.

6. ADVANCED RATE DETERMINATION. Prior to determination, the selecting official, with the counsel of the servicing personnel office, must consider the use of other recruitment incentives to meet the compensation needs of the candidate before the establishment of pay at the higher rate.

   1. Applicants are expected to provide written documentation of current earnings and benefits for verification by the personnel office prior to any commitments to hire. Examples of this type of documentation are:

      (1) a letter from a company official on company stationery confirming the candidate's current salary;

      (2) Earnings and Leave statements when accompanied by the most recent W-2 form or other similarsupport documentation which officially verify actual yearly earnings;

      (3) a letter from the candidate's employer confirming its firm offer of a salary increase; or

      (4) a letter confirming any other earnings on which the special rate would be based.

   2. For purposes of this directive, actual annual earnings include:

      (1) the candidate's salary from his/her present position and from any outside employment which forms a regular, continuing portion of the candidate's total income and which the candidate will not be able to continue after becoming a Federal employee;

      (2) regularly received bonuses;

      (3) current firm offers of salary increase or other employment at a higher salary; and

      (4) fringe benefits which are substantially superior to those offered by the government.

   3. Actual earnings do not include:

      (1) projected earnings for what would have been earned in a year if an individual had been paid for volunteer services;

      (2) projected earnings for a full year when the individual is paid for working for less than a full year term (such as might be the case for a school teacher or college instructor);

      (3) projected earnings for full-time work when the actual hours worked are less than 40 hours a week unless the candidate has an offer to work full-time;

      (4) earnings from a single contract or consulting assignment which are significantly higher than the candidate's previous pay or other current offers; or

      (5) income, such as military retired pay forfeited under the dual compensation law, which the agency is barred from matching by law or executive order.

   4. In comparing fringe benefits, the total benefits package must be considered. The fact that one or more individual fringe benefits are in excess of comparable Federal Government fringe benefits does not necessarily mean that the total benefits package is in excess of the Federal Government's overall fringe benefits package.

7. IMPLEMENTATION PROCEDURES

   1. The servicing personnel office has the authority to make an appointment to a position at a rate above the minimum rate of the appropriate grade but equivalent to what the candidate currently receives in non-Federal employment. Selecting offices must prepare and submit documentation on each case to the servicing personnel office, consisting of: a resume or Optional Form 612, Personal Qualifications Statement, position title, series, grade, step, proposed salary, and duty location; and the rationale for the proposed salary that conforms to criteria contained in paragraph 6 of this section.

   2. When competitively required, the Unit Manager with delegated authority has the authority to approve a rate in excess of the salary the superior candidate receives by up to 10 percent of current salary, but not by more than $5,000. The selecting office must obtain the concurrence of the servicing personnel office. Documentation required is the same as indicated in paragraph 7a, to support the rationale for the salary. Documentation is also required for the "superior" or "unique" qualification determination in conformance with criteria contained in paragraph 5 of this section. When adetermination has been made that there exists a scarcity of candidates for the position, a copy of the Certificate of Eligibles under the merit promotion program and/or SF-39, OPM Certificate will also be maintained as documentation.

   3. When the provision for "special need of the Government for the candidate's services" is involved, and the servicing personnel office proposes to set a rate of pay more than $5,000 above the candidate's current actual earnings, prior approval must be obtained from the Director, Office of Personnel and Training (OPT). (In no case can a request exceed 20 percent of the candidate's actual annual earnings.) This provision can be utilized only in the extremely rare instances when it is determined that although the candidate does not strictly meet the conditions for an advanced-in-hiring rate, there is a need for the services of the candidate because his/her special experience, knowledges or skills are essential to the accomplishment of a highly important agency program. In such cases, selecting offices must prepare and submit documentation to the Chief, Personnel Operations Division for submission to the Director, OPT. Requests from field offices must be submitted through their servicing personnel office. Each proposal must include the following:

      (1) the proposed position title, series, grade, step, salary, and duty location;

      (2) a Personal Qualifications Statement (OF-612) on the proposed candidate; and

      (3) the justification for the proposed salary which conforms to criteria contained in paragraph 6 of this section, explaining fully the need for the services of the candidate.

   4. Documentation on the kinds of cases outlined in paragraphs 7a, 7b, and 7c must be maintained for two full years after the effective date of the personnel action, in a file separatefrom the Official Personnel Folder.

8. EVALUATION PROCEDURES. All servicing personnel offices must annually assess the use of the advanced-in-hiring authority through self-evaluation. The field personnel offices will submit an evaluation report of usage of the authority to the Personnel Operations Division (POD), by December 15 of each year.

   1. Each evaluation report will include the total number of advanced-in-hiring actions taken during the calendar year and a copy of all documentation, as indicated in paragraph 6, and when required paragraph 7, on each action. Evaluation reports should also describe any irregularities detected in the application of this authority; any corrective measures which have been taken or should be taken; and any benefits or problems that developed through the use of this authority. (NOTE: Any significant problems encountered with the use of this authority should be reported to the Chief, POD, OPT, immediately.) Self-evaluations should focus in particular on these problem areas:

      (1) determining if a "double standard" pattern exists, i.e., is the authority being used predominantly for positions in the excepted service as opposed to positions in the competitive service, or is the criteria used to authorize above-minimum rates applied uniformly;

      (2) determining if use of the authority has adversely affected the morale of employees:

      (a) if use of the authority has within the competitive market area created unusual turnover, loss in productivity; or

      (b) if there are repeated instances of turnover because of internal pay inequities which are not supported by distinctions in longevity, ability, or in employee qualifications and their relative value within the organization.

      (3) determining if a pattern of selecting lower-ranked candidates on OPM certificates or merit promotion certificates developed. Such a pattern may exist when:

      (a) on OPM certificates, there are repeated instances of selecting other than the first-ranked candidate at an advanced-in-hiring rate when the first-ranked candidate would have accepted a lower salary; and

      (b) on merit promotion certificates there are repeated instances of selecting a lower-ranked outside candidate with reinstatement eligibility at an advanced-in-hiring rate when a higher-ranked candidate would have accepted a lower salary. This would occur when the highest previous rate rule would not apply because the candidate's current earnings in private industry are higher than what would be allotted to him/her using the highest previous rate rule.

      (4) determining if consistent labor market problems exist in an occupational group or specialty that might best be met by the establishment of a special salary rate. Factors which may serve as indicators are:

      (a) when the total number of advanced-in-hire actions taken have also utilized FEPCA recruitment bonuses or other incentives;

      (b) when there is repeated and consistent use of the advanced-in-hire authority within an occupation inconsistent with the levels of qualifications; or

      (c) when there is frequent turnover within an occupational field.