- 6.531.1 IRS Pay Under the General Schedule
- 6.531.1.1 Determining Rates of Basic Pay - Purpose
- 6.5220.127.116.11 Coverage
- 6.518.104.22.168 Definitions
- 6.522.214.171.124 Entitlement to other Rates of Pay
- 6.5126.96.36.199 Converting Pay upon Change in Location of Official Worksite - GeographicConversion Rule
- 6.5188.8.131.52 Order of Processing Simultaneous Pay Actions
- 6.5184.108.40.206 Applying Annual Pay Adjustments
- 6.5220.127.116.11 Setting Pay for a Newly Appointed Employee
- 6.518.104.22.168 Superior Qualifications and Special Needs Pay-setting Authority
- 6.522.214.171.124 Setting Pay upon Change in Position without a Change in Grade
- 6.5126.96.36.199 Setting Pay upon Promotion
- 6.5188.8.131.52 Additional Guidance - Setting Pay upon Temporary Promotion
- 6.5184.108.40.206 Setting Pay upon Demotion (Change to Lower Grade)
- 6.5220.127.116.11 Setting Pay upon Movement from a Permanent Payband to a GS Position
- 6.518.104.22.168 Maximum Payable Rate (MPR) Rule
- 6.522.214.171.124 Determining the Maximum Payable Rate
- 6.5126.96.36.199 Rates of Basic Pay that May be Used as the Highest Previous Rate(HPR)
- 6.5188.8.131.52 Rates of Basic Pay that May Not be Used as the Highest PreviousRate
- 6.5184.108.40.206 Special Rules for GM Employees
- 6.531.1.2 Within-Grade Increases
- 6.5220.127.116.11 Employee Coverage
- 6.518.104.22.168 Definitions
- 6.522.214.171.124 Earning a Within-Grade Increase
- 6.5126.96.36.199 Waiting Periods for a Within-Grade Increase
- 6.5188.8.131.52 Commencement of a Waiting Period
- 6.5184.108.40.206 Creditable Service
- 6.5220.127.116.11 Equivalent Increase Determinations
- 6.518.104.22.168 Acceptable Level of Competence Determinations - Denying Within-GradeIncreases
- 6.522.214.171.124 Reconsideration of a Negative Determination
- 6.5126.96.36.199 Right to Representation
- 6.5188.8.131.52 Continuing Evaluation After Withholding a Within-Grade Increase
- 6.5184.108.40.206 Effective Date of a Within-Grade Increase
- 6.531.1.3 Quality Step Increases
- 6.5220.127.116.11 Definitions
- 6.518.104.22.168 Purpose of Qualify Step Increases
- 6.522.214.171.124 Level of Performance Required for Quality Step Increase
- 6.5126.96.36.199 Restrictions on Granting Quality Step Increases
- 6.5188.8.131.52 Effective Date of a Quality Step Increase
- 6.5184.108.40.206 Agency Responsibilities
- 6.531.1.4 Locality-Based Comparability Payments
- 6.5220.127.116.11 Definitions
- 6.518.104.22.168 Locality Pay Areas
- 6.522.214.171.124 Determining an Employee's Locality Rate
- 6.5126.96.36.199 Determining an Employee's Official Worksite
- 6.5188.8.131.52 Computing Hourly, Daily, Weekly, and Biweekly Locality Rates
- 6.5184.108.40.206 Relationship of Locality Rates to Other Pay Rates
- 6.5220.127.116.11 Adjusting or Terminating Locality Rates
- 6.518.104.22.168 Treatment of Locality Rate as the Rate of Basic Pay
- 6.522.214.171.124 Miscellaneous Provisions
Part 6. Human Resources Management
Chapter 531. 1 Pay Under the General Schedule
Section 1. IRS Pay Under the General Schedule
This chapter provides policy guidance on setting and adjusting rates of basic pay for General Schedule (GS) employees. It is organized consistent with the regulations contained in 5 CFR 531.
The Internal Revenue Service Pay Setting Desk Guide, Document 12626, should be used in conjunction with this chapter and contains helpful examples of these pay setting procedures. The guide can be accessed via the Electronic Publishing catalog on the IRWeb and also on the Human Capital Office (HCO) web site at http://hco.web.irs.gov/pdf/psdeskguide.pdf .
Information on compensation issues for positions covered under the IRS Payband System, including topics such as performance-based increases, performance bonuses, and pay-setting rules can be found at http://hco.web.irs.gov/apps/payband/ .
This chapter applies to all IRS employees in GS, GM (employees formerly covered by the Performance Management and Recognition System), and GL (Law Enforcement Officer (LEO)) positions. This chapter also applies to employees in other pay plans (e.g., IRS payband (IR)) who are moving into GS or GL positions. This chapter does not apply to employees in Senior Executive Service (SES) positions, senior-level positions, positions for which appointees are paid under 5 U.S.C. 9503, and positions covered by the Federal Wage Schedule (FWS). The guidance and practices reflect applicable law, regulations, and Comptroller General and Office of Personnel Management (OPM) decisions concerning pay administration under the GS. They are intended to establish Servicewide procedures and to ensure consistent treatment of employees. Therefore, these instructions must be applied in conjunction with pertinent law, regulation, and decisions. IRS officials who have been delegated authority to approve personnel actions are responsible for ensuring that employees are paid appropriately.
For employees in bargaining units covered by negotiated agreements, appropriate negotiated agreement provisions relating to subjects in this Chapter should also be reviewed. For bargaining unit employees, should any of these instructions conflict with the negotiated agreement, the agreement will prevail.
The definitions used in this chapter are consistent with those contained in 5 CFR 531.203.
"Highest applicable rate range" means the rate range applicable to a GS employee based on a given position of record and official worksite that provides the highest rates of basic pay, excluding any retained rates.
"Pay schedule" means a set of rate ranges established for GS, GM, GL, IR, or FWS employees. A pay schedule covers a defined category of employees based on established coverage conditions (e.g., official worksite, pay plan, occupation).
"Payable rate" refers to the highest rate of basic pay (including locality or special rate) to which an employee is entitled based on the employee's position of record, official worksite, and step (or relative position in range), or if applicable, a retained rate.
"Rate of basic pay" is the rate fixed for a position before any deductions.
Rates of basic pay within IRS include the underlying GS rate, LEO special base rate, locality rate, special rate, underlying IR payband rate, IR locality rate, and a retained rate.
"Underlying GS rate or underlying rate of basic pay" means a rate of pay which excludes locality rates and special rates.
A LEO is entitled to LEO (GL) special base rates in lieu of GS rates at grades GS-3 through GS-10.
If pay-setting rules require an employee's underlying base rate to be determined first, then identify any other rate of basic pay to which the employee is entitled, including any locality rate or special rate. The employee is entitled to the highest applicable rate of basic pay as his or her payable rate.
When setting pay in the highest applicable pay schedule (e.g., a GS locality or special rate schedule), determine the underlying rate by finding the corresponding underlying rate with the same grade and step (or relative position in range for GM employees) as the payable rate.
When an employee's official worksite is changed to a new location where different pay schedules apply, the geographic conversion rule is applied. The employee's current rate of basic pay must be converted to the applicable pay schedule in the new location using the employee's grade and step or placement in the rate range before the change in worksite. Then, any simultaneous pay action may be processed (other than a general pay adjustment). (See 6.5126.96.36.199.)
When multiple pay actions with the same effective date affect an employee's rate of basic pay, the actions will be processed in the following order:
General pay adjustments, including performance-based increases (PBI) and special rate adjustments;
Within-grade increase (WGI) or quality step increase (QSI);
Except as provided above, process individual pay actions occurring on the same date in the order that gives the employee the maximum benefit.
Except as otherwise provided in this subsection, on the effective date of a GS pay adjustment (normally effective the first pay period of the year), the IRS must set the pay rate of a GS employee at the rate on the new GS schedule which corresponds to the employee's current grade and step.
For employees receiving a retained rate (i.e., pay retention) immediately before the effective date of an annual pay adjustment, the rules in 5 CFR 536.305 must be followed.
IR salary tables will be adjusted in accordance with GS pay adjustments. See http://hco.web.irs.gov/apps/payband/index.htm .
For GM employees, the rules in 5 CFR 531.244 must be followed.
First appointment - IRS will set the payable rate of basic pay at the minimum rate (step 1) of the highest applicable rate range, except when using the superior qualifications/special needs pay-setting authority discussed later in 6.5188.8.131.52.
Reemployment/Reinstatement - For an employee who has previous Federal service, IRS will set the payable rate of basic pay at the minimum rate of the highest applicable rate range unless:
Superior qualifications/special needs pay-setting authority is used (see 6.5184.108.40.206); or
The employee is eligible for a higher payable rate in accordance with the maximum payable rate (MPR) rules at 6.5220.127.116.11.
The IRS may use the superior qualifications/special needs pay-setting authority to set pay for an employee above the minimum rate (step 1) of the highest applicable rate range for the following:
A first appointment (regardless of tenure) as a civilian employee of the Federal Government; or
A reappointment when the employee had a break in service of at least 90 days.
Note that a time-limited, expert or consultant, provisional, or Student Career Experience Program appointment can occur during the 90-day break in service without affecting the employee's eligibility.
The IRS must consider the possibility of authorizing a recruitment incentive before approving a superior qualifications/special needs appointment.
The employee must meet one of the two superior qualifications or special needs criteria outlined below before this authority can be used:
The selectee must have unusually high (superior) qualifications for the particular position based on the level, type, or quality of the candidate's skills or competencies demonstrated or obtained through experience and/or education. The candidate's skills, competencies, experience, education, and/or accomplishments must be relevant to the requirements of the position to be filled and be significantly higher than those minimally required; or
The selectee must have a unique combination of education and experience that meets a special need of the Service. The experience that is the basis for setting pay at the higher rate must be closely related to the work of the position being filled and must be essential to accomplishing an important agency mission, goal, or program activity.
In determining the step at which to set an employee's payable rate under this authority, one or more of the following factors outlined in 5 CFR 531.212(c) should be considered:
The level, type, or quality of the candidate's skills or competencies;
The candidate's existing salary, recent salary history, or salary documented in a competing job offer;
Significant disparities between Federal and non-Federal salaries for the competencies required;
Existing labor market conditions and employment trends, including the availability and quality of candidates for the same or similar positions;
The success of recent efforts to recruit candidates for the same or similar positions;
Recent turnover in the same or similar position;
The criticality of the position being filled and the effect on the IRS if it is not filled;
The desirability of the geographic location, duties, and/or work environment; and/or
Organizational workforce needs, as documented in the strategic human capital plan.
Division commissioners, and officials in equivalent positions, are delegated authority to approve use of this authority. This authority cannot be redelegated below the level of the Embedded Human Resources (HR) Director within the division.
Approvals must be documented in writing prior to the individual entering on duty;
Documentation must show the superior qualifications of the candidate or the special need for the candidate's services and include an explanation of the factor(s) and any supporting documentation used to justify the rate at which the employee's pay was set;
The approval documentation must be placed on the permanent side of the employee's Official Personnel Folder; and
A copy of the approval authority and a record supporting the higher rate must be maintained for 3 years by the applicable Embedded HR office and, as appropriate, shall include:
1. Written documentation that a recruitment incentive was first considered;
2. Data showing the non-Federal sector rate of pay that is higher than provided by the minimum rate of basic pay for the grade;
3. Verification of a higher current salary or a copy of a competing job offer letter; and
4. The appointment authority (e.g., certificate or direct hire authority).
If an employee is moved from one GS position to a different GS position without a change in grade or a break in service, the employee's payable rate of basic pay and any underlying rate of basic pay are based on the employee's:
New official worksite; and
Step in effect before the position change.
This movement includes transfer, reassignment, change in type of appointment (e.g., conversion), change in official worksite, or other change in position.
If an employee is afforded pay retention, apply the rules in 5 CFR part 536.
Coverage - These promotion rules apply to GS employees moving from one GS grade to a higher GS grade without a break in service and are consistent with the two-step promotion rule in 5 U.S.C. 5334(b).
Geographic Conversion Rule - When an employee's official worksite is changed to a new location where a different pay schedule applies, the employee's current position must first be converted to the applicable pay schedule and rate for the new official worksite, based on the grade and step of the position of record before the move, before applying the promotion rules.
Simultaneous WGI - A WGI or QSI effective on the same date as a promotion must be processed before processing the promotion action. (See 6.518.104.22.168.)
Promotion Rule - An employee's payable rate of basic pay is determined using one of three methods:
The standard method;
The alternate method; or
The rule for employees receiving a retained rate of pay before promotion.
Determining Applicable Method - Use the following rules to determine which promotion method to use:
The Standard Method is applied when the employee is covered by the same pay schedules before and after the promotion (e.g., locality to locality).
Standard Method Promotion Rule Step A: Apply the geographic conversion rule to determine the employee's rate of basic pay based (includes locality or special rate) on the employee's position of record before promotion and the new official worksite. Then, apply any WGI or QSI effective on the same date as the promotion. Use the resulting rate of basic pay as the existing rate of basic pay in applying steps B and C. Step B: Identify the employee's underlying GS rate (or LEO (GL) special rate) in the grade before promotion and increase that rate by two GS/GL WGIs for that grade. Step C: Determine the payable (highest) rate of basic pay for the step or rate determined in Step B by applying any locality payment or special rate supplement applicable to the given grade, based on the employee's position of record before promotion and official worksite after promotion. Step D: Identify the highest applicable rate range for the employee's position of record after promotion and find the lowest step in that range that equals or exceeds the rate determined in Step C. If the rate identified in Step C exceeds the step 10 rate, the employee's payable rate is the step 10 rate.
The Alternate Method is applied when the employee is covered by different pay schedules before and after promotion and if it produces a higher payable rate than the standard method (e.g., locality to special rate).
Alternate Method Promotion Rule Steps A, B, and C are the same steps as the Standard Method Promotion Rule above. Step D: Identify the highest applicable rate range for the employee's new grade after promotion based on consideration of any pay schedule that applied to the employee's position of record before promotion (after any geographic conversion). Do not consider pay schedules that apply only to the employee's new position of record after promotion. Find the lowest step in the highest applicable rate range that equals or exceeds the rate identified in Step C. If that rate exceeds the step 10, the employee's payable rate is the step 10 rate. Step E: Convert the lowest step rate identified in Step D to the same corresponding step in the highest applicable rate range for the employee's new position of record after promotion. This rate is the employee's alternate payable rate of basic pay upon promotion.
If the rate derived under Step D was a retained rate, determine the alternate payable rate of basic pay as provided in 5 CFR 531.214(d)(4)(ii) to determine the alternate payable rate.
Step F: If the alternate payable rate identified in Step E exceeds the payable rate resulting from the final step in the standard method, the employee is entitled to the higher alternate rate upon promotion. Otherwise, the employee is entitled to the payable rate derived under the standard method.
The IRS may choose to apply the alternate method when it produces a lesser payable rate than the standard method only under the following conditions:
The employee is covered by different pay schedules before and after the promotion;
The IRS determines that the position held before promotion is not sufficiently related to the knowledge and skills required for the position after the promotion; and
The IRS informs the employee of the determination to use the alternate method before the effective date of the promotion.
Employee Receiving a Retained Rate of Pay (i.e., pay retention) : If an employee was receiving a retained rate before promotion, apply the applicable standard or alternate promotion methods described above using the maximum rate (step 10), not the retained rate, of the employee's current grade before promotion.
• If the calculated rate of basic pay after promotion is greater than the employee's existing retained rate of basic pay before promotion, the employee is entitled to that higher rate of pay.
• If the existing retained rate of basic pay is greater than the rate calculated under the standard or alternate method promotion rule, the retained rate must be compared to the highest applicable rate range for the position after promotion. (See 5 CFR 536.304.) The employee is entitled to the lowest step in the range that equals or exceeds the retained rate or to the retained rate, if that rate exceeds the range maximum.
Employee Being Promoted from GS-1 or GS-2: In applying the promotion rules to an employee who is promoted from step 9 or 10 of grade GS-1 or GS-2, the value of two WGIs is determined by doubling the WGI between steps 9 and 10 for the applicable grade.
Temporary Promotions Made Permanent (Same Grade) - If a temporary promotion is made permanent immediately (i.e., with no break in service) from a temporary promotion, the employee will not first be returned to the lower grade (i.e., no change to lower grade (CLG) action is processed). The employee's temporary promotion is converted to a permanent promotion without a change in pay. This applies to all permanent promotion actions processed immediately from a temporary promotion (at the same GS grade) including those where the position is changing. (See CFR 531.214(e).)
Retroactive Promotions - Federal employees may be retroactively promoted under the Back Pay Act (5 U.S.C. 5596) only when an appropriate authority corrects or directs the correction of an unjustified or unwarranted personnel action that resulted in the withdrawal, reduction, or denial of all or part of the pay due the employee. An unjustified or unwarranted personnel action means an act of commission or an act of omission (i.e., failure to take an action or confer a benefit) that an appropriate authority subsequently determines on the basis of substantive or procedural defects, to have been unjustified or unwarranted under applicable law, mandatory personnel policy established by the IRS, or through a collective bargaining agreement. See (IRM 6.522.214.171.124.)
The same rules apply to set pay for temporary and permanent promotions.
Provided there is no break in service, whenever possible, temporary promotions are processed directly to the next position without an intervening CLG, even if the employee's current position is temporary (e.g., the employee is serving on a temporary promotion and receives another temporary promotion to a higher grade (i.e., stacked promotion)).
Movement from one temporary promotion to another temporary promotion (same or different position) at the same grade will be processed as a temporary promotion.
The employee is not first returned to the lower grade, and the grade and step are unchanged. Salary may change based on any applicable geographic conversion.
Movement without a break in service from a stacked promotion to a temporary promotion at the same grade as the initial temporary promotion (i.e., return to the initial temporary promotion grade) will also be processed directly as a temporary promotion with no intervening CLG action.
Pay will be set as if the second (i.e., stacked) temporary promotion had not occurred. Apply any WGIs the employee would have received on the initial temporary promotion. If appropriate, apply highest previous rate (HPR) under the MPR rule (e.g., the stacked promotion was held for more than 1 year (365 days). See 6.5126.96.36.199-17 for a full discussion of the MPR rule and HPR.
The date of last equivalent increase (DLEI) is reset to the date of the first temporary promotion as if the stacked temporary promotion had not occurred, unless HPR is applied and results in a higher rate of pay. (See 5 CFR 531.407(3).)
Except as otherwise provided in this subsection, an employee who is demoted (i.e., CLG), is entitled to the minimum payable rate of basic pay for the lower grade unless the employee's pay is set at a higher rate under grade and pay retention rules (see 5 CFR part 536) or the MPR rule. (See 6.5188.8.131.52.)
Geographic Conversion - If the employee's official worksite after demotion is in a different geographic location where different pay schedules apply, the geographic conversion rule must first be applied (see 6.5184.108.40.206 and 6.5220.127.116.11) before setting pay in the new position.
Expiration or Termination of Temporary Promotion -
When an employee on a temporary promotion is returned to his or her permanent position of record (i.e., CLG), the employee's payable rate of basic pay must be set as if he or she had not been temporarily promoted, unless the IRS sets pay at a higher rate under the MPR rule. (See 6.518.104.22.168.)
When an employee on a stacked temporary promotion is returned to the temporary promotion held just prior to that stacked promotion, the action is processed as a temporary promotion (not a CLG) in accordance with 6.522.214.171.124(4).
When an employee on a temporary promotion is placed in a temporary position at a grade lower than that held immediately prior to the current temporary promotion; and that lower-graded temporary position is at a grade higher than the permanent position of record, pay is set as follows:
1. Return the employee to the permanent position of record (CLG);
2. Apply any WGI's the employee would have earned had the temporary promotion not occurred. HPR will not be applied because of the known repromotion (see 6.5126.96.36.199(2)(b); and
3. Temporarily promote the employee to the new temporary position.
4. Pay may be set in the new position considering the HPR earned in the initial temporary promotion only if that initial temporary promotion was held for more than 1 year (365 days). (See 6.5188.8.131.52(3).)
5. The DLEI is reset to the date of the new temporary promotion. (See 6.5184.108.40.206(1)(b).)
Time spent on a temporary promotion is creditable towards the WGI in the lower grade if:
1. Employee is returned (i.e., CLG) to the permanent position of record; or
2. Employee is returned directly (without a CLG) to another temporary position.
HPR will not be used to set pay upon termination of a temporary promotion into or out of a position covered by a payband, regardless of the time served on the temporary promotion.
Demotion upon Failure to Complete a Supervisory Probationary Period - When an employee promoted permanently to a supervisory or managerial position does not satisfactorily complete the probationary period and is returned to a position at the lower grade held before the promotion, the rate of basic pay must be set as if the promotion had not occurred (i.e., apply any WGI's and pay adjustments the employee would have received in the original GS position).
Correcting an Erroneous Demotion - When a demotion is determined to be erroneous and is canceled, the rate of basic pay is set as if the employee had not been demoted. The action is a correction of the original demotion (cancellation) and may not be treated as a promotion.
Demotion for Cause/Inefficiency - Pay is set considering partial application of HPR given the employee's length of service spent at the grade from which demoted, the grade of the demotion, and any intervening grades. For example, a GS-12 employee is demoted to the GS-9. The employee has a total of 8 years of service in the three grades (2 years at the GS-12, 5 years at the GS-11, and 1 year at the GS-9). If the employee had remained at the GS-9 grade level for 8 years, he or she would have been a GS-9, step 6. Therefore, the business unit taking the action may set the employee's pay no lower than GS-9, step 1, and no higher than GS-9, step 6. The actual rate of basic pay at the higher grade is not considered in setting pay at the lower grade when the demotion is for cause/inefficiency.
When an employee in a payband (IR) position moves to a GS position, the conversion-out procedures of the OPM Criteria for IRS Broadbanding System at http://www.opm.gov/fedregis/2000/65-79433-a.pdf are followed before applying the GS pay-setting rules.
If the employee leaves the payband before experiencing a pay event, the employee's salary is set as if the employee never entered the payband.
A pay event occurs when the employee enters the payband via a personnel action such as a promotion, demotion, reassignment, or when the PBI occurs. (This includes a zero dollar increase.)
If the employee leaves the payband after experiencing a pay event, the employee's payband and pay rate must be converted to a GS equivalent grade and rate of pay before processing any simultaneous personnel actions and before applying GS pay setting rules.
Determining the GS-Equivalent Grade -
For an employee in a payband encompassing a single grade (e.g., the front-line manager (FM) payband), the single grade is the GS equivalent grade.
For employees in paybands encompassing more than one GS grade (e.g., the senior manager (SM) and department manager (DM) paybands), the GS equivalent grade is determined as follows:
1. If the employee's underlying rate of basic pay falls within the underlying rate range of only one of the GS grades encompassed by the payband, convert the employee to that GS grade.
2. If the employee's underlying rate of pay is covered by the rate ranges of two GS grades (e.g., either the GS-11/12 grades or the GS-12/13 grades within the DM payband, or the GS-14/15 grades within the SM payband), the appropriate grade level must be determined by calculating the midpoint of the two grades' overlap, and then determining if the employee's existing underlying rate of basic pay is less than, equal to, or greater than that midpoint. Follow the steps below to calculate the midpoint of the two grades' overlap, using the underlying GS pay schedule:
Step 1: Subtract the lowest rate (step 1) of the higher grade from the highest rate (step 10) of the lower grade;
Step 2: Divide the result of the subtraction in half; then
Step 3: Add that amount to the lowest rate (step 1) of the higher grade. That result is the midpoint of the overlap.
Determine if the employee's existing underlying rate of basic pay is above or below the midpoint of the overlap calculated in Step 3 above.
If the employee's underlying rate is equal to or greater than the midpoint, the GS-equivalent grade is the higher grade.
If the employee's underlying rate is less than the midpoint, the GS-equivalent grade is the lower grade.
Determining the GS-Equivalent Pay Rate - Having determined the GS-equivalent grade level, the employee's existing underlying rate of pay will be used as the basis for setting pay in the GS system when the employee is moved to the GS position. Do not adjust the converted rate of pay to a step rate.
If the grade of the new position is a higher grade than the GS-equivalent grade, as determined by the process in 6.5220.127.116.11(4) above, apply GS pay-setting rules for promotion (i.e., the two-step promotion rule).
If the grade of the new position is the same grade as the GS-equivalent grade, apply GS pay-setting rules for reassignment.
If the employee's new GS position is a lower grade than the GS-equivalent grade, apply GS pay-setting rules for a demotion.
Application of the MPR rule is discretionary and allows the IRS to set pay for employees at a higher rate than would normally be established, based on a higher rate of pay previously received in another Federal job. The rate derived from this MPR is known as the HPR. In some circumstances, the MPR rule may be used to determine an employee's rate of basic pay upon reemployment, transfer, reassignment, promotion, demotion, change in type of appointment (e.g., conversion), movement from a non-GS pay system, or upon termination of grade or pay retention.
When an employee is reinstated or reemployed, pay will be set considering the employee's experience and qualifications. An employee will be afforded the benefits of the MPR rule if:
The prior Federal work experience and qualifications are applicable to the position in which the employee is being reinstated or reemployed.
The HPR reviewed upon reinstatement/reemployment is considered only once. If it is not applied at the time of appointment, no further consideration of that rate will be given.
Employees transferring without a break in service will be afforded HPR, regardless if their previous experience is applicable to the new position, if that process will produce a higher pay rate. Pay is set in accordance with the type of action occurring (i.e., reassignment, demotion, or promotion).
The authority to apply the MPR rule in discretionary situations, such as the reassignment of an employee from a special rate position (see 6.518.104.22.168), is delegated to members of the SES and officials in equivalent positions.
Pay set under the MPR rule must take effect on the effective date of the action involved. The MPR rule may not be used to set an employee's rate of basic pay retroactively unless:
The retroactive action is required to comply with a nondiscretionary IRS policy (e.g., transfers); or
The SF-50, Notification of Personnel Action, for the appointment contained the remark, "Pay rate is subject to upward retroactive adjustment upon verification of prior service."
When calculating the employee's MPR, use the appropriate rule stated in 5 CFR 531.221, as outlined below.
When the HPR is based on a GS rate, set pay as follows:
Step 1: Use the underlying GS rate schedule in effect when the HPR was earned and refer to the grade of the position in which the employee will be placed;
Step 2: Identify the lowest step in that grade which is equal to or greater than the employee's HPR (or step 10 rate if the HPR exceeds the maximum GS rate);
Step 3: Identify the rate on the current underlying GS pay schedule that corresponds to the step identified in Step 2; then
Step 4: After setting the employee's underlying GS rate, determine the employee's payable rate of basic pay (e.g., locality or special rate).
When the HPR is based on a LEO (GL) special rate, see 5 CFR 531.221(b) for MPR pay-setting rules.
When the HPR is based on a GS employee's special rate, as permitted only under the special conditions stated in 6.531.1.16(2):
Step 1: Compare the former special rate to the rates of basic pay in the highest applicable rate range for the employee's current position and geographic location (if current worksite is in a different geographic area, see 5 CFR 531.221(c)(2).
Step 2: Identify the lowest step rate in that range that equals or exceeds the former special rate (or step 10 if the HPR exceeds the maximum range). That step rate is the employee's maximum payable rate of basic pay.
To identify the MPR when the HPR is based on a non-GS rate (e.g., an IR rate, a FWS rate, or another non-GS rate earned at a different agency):
Step 1: Compare the HPR to the highest applicable GS rate range (includes a locality or special rate) of the grade and position in which the employee will be placed that was in effect at the time and place (i.e., geographic location) the HPR was earned;
Step 2: Identify the lowest step in that grade which is equal to or greater than the employee's HPR (or step 10 rate if the HPR exceeds the maximum range);
Step 3: Convert the step rate identified in Step 2 to a corresponding rate (same step) on the current highest applicable rate range for the GS grade, in the new position of record and official worksite. That step rate is the MPR of basic pay.
Step 4 : After setting the employee's rate of basic pay using the same GS step, determine the current underlying rate of basic pay.
The HPR must be a rate of pay based on a regular tour of duty earned while serving under an appointment not limited to 90 days or less, or for a continuous period of not less than 90 days without a break in service. Note: Even if these minimum statutory requirements are met by the employee's service, that service may be deemed inappropriate for use as HPR in certain objectionable situations (e.g., upon voluntary change to lower grade after serving less than 6 months in a permanent position).
HPR may be based on a special rate only when all the following conditions apply:
The employee is reassigned within IRS or from another position in the Department of the Treasury at the same grade level;
The special rate is the employee's existing rate of basic pay immediately before the reassignment; and
The authorized official (see 6.522.214.171.124(4)) finds that the need for the services of the employee and the employee's contribution to the Department of the Treasury will be greater in the position to which reassigned.
The rate earned on a temporary promotion held for 1 year (365 days) or more may be used to set pay under the MPR rule.
HPR may be based on a rate received during a series of continuous (i.e., no CLG and/or break in service of 1 or more days has occurred) temporary promotions as follows:
a temporary promotion is extended so that the total time equals or exceeds 1 year;
the combined time for consecutive multiple temporary promotions at the same or different grades equals or exceeds 1 year (employee is eligible for HPR from the lower grade unless the total time served at the higher grade(s) equals or exceeds 1 year).
Employees on seasonal appointments confer eligibility for HPR in the same way as other appointments. Provided all requirements are met, a rate earned in a seasonal position may be used to set pay regardless of the number of days worked during the period of seasonal employment.
By regulation (5 CFR 531.223), HPR may not be based on the following rates:
A rate earned under an expert or consultant appointment;
A rate received on a temporary promotion for less than 1 year, except upon permanent placement in a GS position at the same or higher grade (or equivalent) as the temporary promotion previously held. This can occur at any time and be for any position. When the temporary promotion was to a payband position, use the conversion out process described at 6.531.1.13 to determine the equivalent GS grade level;
A rate received in a position from which the employee was reassigned or reduced in grade for failure to satisfactorily complete a probationary period as a supervisor or manager;
A rate received by an individual while employed by the government of the District of Columbia who was first employed by that government on or after October 1, 1987;
A special rate, except as provided in 6.5126.96.36.199(2) above; or
A rate received under a void appointment.
The 5 U.S.C. 5335 defines the waiting period for movement through the steps of a grade. There are situations when the application of HPR could violate statutory requirements for waiting periods. Therefore, IRS policy does not permit the use of HPR for the following rates:
A rate earned on a temporary promotion into or out of a position covered by the IRS Payband System, regardless of the time served on the temporary promotion;
A rate earned in a temporary promotion that exceeded 1 year when, at the time of the CLG, the employee is likely to be promoted, either permanently or temporarily, within 6 months. Note that if the rate is not used as HPR at the time of this CLG from the position in which it was earned, that rate cannot be used again in a future demotion (i.e., CLG) action. (See 6.531.1.16(3) and 6.5188.8.131.52(1)b for situations when the rate may be used for future promotion actions.); and
A rate earned prior to the employee accepting a CLG when repromotion is imminent within 6 months (e.g., employee selected to a lower-graded position with known promotion potential, and employee meets eligibility for promotion within the next 6 months).
Regulations involving retaining and losing GM status, setting pay upon loss of GM status, promotion of a GM employee, adjusting a GM employee's rate at the time of an annual pay adjustment, computing locality rates and special rates for GM employees, WGI's for GM employees, and the MPR rule for GM employees, are found at 5 CFR 531.241-247.
This guidance must be applied in conjunction with the provisions at 5 CFR 531, subpart D.
This guidance applies to IRS employees who occupy permanent positions classified and paid under the GS or GL and who are paid less than the maximum rate of their grades. This section does not apply to:
Members of the SES or appointees paid under 5 U.S.C. 9503;
Individuals appointed by the President, by and with the advice and consent of the Senate; and
Individuals occupying positions covered under the IRS Payband System.
For purposes of WGI's, permanent position means a position filled by an employee whose appointment is 1 year (365 days) or more. The definition of a permanent position includes a position to which an employee is promoted on a temporary basis for at least 1 year. This includes a " temporary, not-to-exceed 1 year" promotion only when extended beyond 1 year.
The definitions used with reference to WGI's are the same as those in 5 CFR 531.403.
For WGI purposes, rate of basic pay means the rate of pay held by an employee before any deductions and exclusive of additional pay of any kind. For an employee covered by the GS, that rate of basic pay is the underlying GS rate, or if applicable, a LEO special base rate.
An employee paid less than the maximum step (step 10) of the grade of the position held shall advance in pay to the next higher step upon meeting the following three statutory requirements:
The employee's performance is at an acceptable level of competence; that is, his or her rating of record shall be at least Level 3 (" Fully Successful" or equivalent). If the rating of record does not reflect the employee's current performance, a more current rating of record must be prepared. The rating of record that forms the basis for awarding a WGI must not have been assigned earlier than the beginning of the most recent completed appraisal period;
The employee must have completed the required waiting period for movement to the next step or rate; and
The employee must not have received an equivalent increase during the required waiting period (see 6.5184.108.40.206).
For advancement to the next step, an employee with a scheduled tour of duty must possess:
52 calendar weeks of creditable service to advance to step 2, 3, or 4;
104 calendar weeks of creditable service to advance to step 5, 6, or 7; and
156 calendar weeks of creditable service to advance to step 8, 9, or 10.
An employee without a scheduled tour of duty (e.g., intermittent) must possess:
260 days of creditable service in not less than 52 weeks to advance to step 2, 3, or 4;
520 days of creditable service in not less than 104 weeks to advance to step 5, 6, or 7; and
780 days of creditable service in not less than 156 weeks to advance to step 8, 9, or 10.
A waiting period begins:
On the first appointment as an employee of the Federal Government, regardless of tenure;
Upon receiving an equivalent increase; or
After a period of nonpay status or a break in service (alone or in combination) of more than 52 calendar weeks, unless the nonpay status or break in service constitutes creditable service under 5 CFR 531.406 (e.g., military service).
A waiting period is not interrupted by non-workdays intervening between the last scheduled workday in one position and the first scheduled workday in another position (i.e., with no break in service).
See 6.5220.127.116.11(3) for information regarding QSIs.
Creditable service, including limited periods of leave without pay, will be granted as provided in 5 CFR 531.406.
For GS and GL employees, an equivalent increase is considered to occur at the time of any of the following personnel actions:
A WGI or an interim WGI that is later terminated under 5 CFR 531.414;
A permanent or temporary promotion to a higher grade, except when:
• An employee on a temporary promotion is returned to the grade from which promoted and pay is set as if the temporary promotion had not occurred; or
• The employee is returned to the GS grade previously held after failing to complete a supervisory probationary period.
A promotion of an employee with a retained rate even when the action does not result in an increase of pay;
Application of the MPR rule resulting in a higher step rate within the employee's grade, except when:
• the MPR is applied in a demotion; and
• the employee's new rate of pay (underlying) does not exceed the lowest step rate that equals or exceeds his/her underlying rate of pay before the demotion.
January 2005 GS-9, step 7, employee is temporarily promoted to GS-11, step 3 January 2006 Promotion extended; employee receives WGI to GS-11, step 4 (underlying rate of pay of $50,809) January 2007 Promotion extended (underlying rate of basic pay of $51,672) August 2007 Temporary promotion ends; employee's pay is set using MPR rule at GS-9, step 10 (underlying rate of basic pay of $50,470)
Although application of the MPR rule resulted in a higher step within the employee's GS-9 grade (step 10 versus step 7), his or her new underlying rate of pay did not exceed the underlying rate of pay of the GS-11, step 4, held immediately before the demotion. Therefore, the application of MPR did not constitute an equivalent increase; rather, the last equivalent increase occurred when the WGI on the temporary promotion was received in January 2006.
For an employee in the IR pay system who moves into the GS pay system, an equivalent increase is considered to have occurred at the time of any of the following actions:
• A permanent or temporary promotion to a higher grade or band level.
• A PBI, including a zero dollar increase.
Increases in locality and special rates, and general across-the-board pay adjustments, are not considered in making equivalent increase determinations.
A QSI is given in addition to a regular WGI and is not considered an equivalent increase. A QSI does not affect the timing of an employee's next WGI unless the QSI places the employee in step 4 or 7 of his or her grade, in which case the waiting period is extended an additional 52 weeks, consistent with 6.518.104.22.168 above.
The supervisor shall make determinations regarding acceptable level of competence in accordance with 5 CFR 430, subpart B, and 5 CFR 531, subpart D. If the current rating of record is less than fully successful, consideration must be given to denying the WGI. An employee should be informed as soon as management becomes aware that the WGI may be denied, but at least 60 days prior to the date an employee is eligible for a WGI. Before considering any action involving a bargaining unit employee, the National Agreement should be consulted to ensure consistency with those contract provisions as well as with this IRM. For all employees, the manager should consult with Labor Relations in developing a written notice of intent to deny the WGI, which should contain the following information: (Refer to the sample notice at http://hco.web.irs.gov/compbenefits/pay/index.html .)
Notice of the critical element(s) and performance standard(s) in which the employee's work is not acceptable;
Instances wherein the employee's performance falls below the acceptable level;
Advice as to what the employee must do to bring his/her performance up to the acceptable level;
A statement that performance may not merit a WGI unless improvement to an acceptable level is shown:
A statement that a period of at least 60 days will be given to improve performance; and
A statement regarding tax disclosure restrictions if taxpayer information is included in the notice.
When the 60-day notice to an employee is issued with less than 60 days until the date of eligibility, the acceptable level of competence determination and the annual rating will be postponed until the full 60 days have passed. At that time, if the evaluation is fully successful, the effective date of the WGI will be the original eligibility date. The employee must be notified in writing. (Refer to the sample notice at http://hco.web.irs.gov/compbenefits/pay/index.html .)
A negative determination should always be made as close to the end of the waiting period as possible. The determination will be reviewed and approved at the next higher level in the organization than that of the official delegated to make the initial determination. This review will be completed before the employee is notified of the determination.
The supervisor, after consultation with the labor relations specialist, shall notify the employee in writing that the WGI is being withheld. The notice will include the following: (Refer to the sample notice at http://hco.web.irs.gov/compbenefits/pay/index.html .)
Reference to the 60-day notice period;
Statement informing the employee of the reason for the denial and the fact that the WGI is being denied;
Statement that if performance improves to an acceptable level at some future date, the WGI will be granted effective the first day of the first pay period following its approval and certification;
Statement that the employee may make a written request for reconsideration and that the request is due within 15 calendar days from the date of the receipt of the negative determination letter. (Indicate to whom the request for reconsideration should be addressed.);
Statement that employee has the right to contest the negative determination, both personally and in writing, as well as the right to be represented by an attorney or other representative;
Statement regarding official time to prepare and present the request for reconsideration; and
Statement regarding tax disclosure restrictions if taxpayer information is included in the notice.
The denial of the WGI must be supported by substantial evidence. Substantial evidence is that degree of relevant evidence that a reasonable mind, considering the record as a whole, might accept as adequate to support a conclusion that the matter asserted is true.
The decision to grant or deny a WGI to an employee must be supported by the employee's most recent rating of record made pursuant to 5 CFR 430. If the most recent rating of record does not support the decision, a new rating must be prepared.
The employee or the employee's representative may request reconsideration of the negative determination within 15 calendar days after the receipt of the negative determination by filing a written response setting forth the reasons reconsideration should be considered.
The request may be submitted to the official who denied the WGI.
This official may then review the reconsideration request and grant the increase, or the request may be forwarded directly to the reconsideration official.
The reconsideration official is an official at least one level above the official who initially denied the WGI and who had no part formally or informally in the initial determination, including its review and approval.
When a reconsideration request is made, a Reconsideration File will be established. The file will not contain any document that has not been made available to the employee or the employee's representative and will include the following material:
A copy of the 60-day warning notice issued to the employee;
The written negative determination and supporting documents;
The employee's written request for reconsideration;
The report of any investigation made;
The written summary or transcript of any personal presentation made; and
The decision regarding the request for reconsideration.
An employee in duty status will be given a reasonable amount of official time to review the material relied upon and to present the response for reconsideration.
If the employee personally presents a response for reconsideration, a written summary or verbatim transcript must be completed. The employee or his or her representative should be given a copy to corroborate on the content and accuracy. A due date should be established for the return of the verified or corrected summary or transcript with the reminder that if it is not received by that date, it will be considered as it stands.
The reconsideration decision will be issued promptly after receipt of any oral and/or written replies.
If the WGI is granted after reconsideration, the employee must be notified. (Refer to the sample notice at http://hco.web.irs.gov/compbenefits/pay/index.html .) The WGI will be granted retroactive to the original due date.
If the reconsideration decision sustains the denial of the WGI, the notice should include the following: (Refer to the sample notices for bargaining unit and non-bargaining unit employees at http://hco.web.irs.gov/compbenefits/pay/index.html .)
A statement referencing the reconsideration request and what has been considered in making a final determination, including reference to oral and/or written replies;
A statement that the decision to deny the WGI is sustained;
For bargaining unit employees, applicable negotiated agreement grievance rights and allegation of discrimination appeal rights;
For non-bargaining unit employees, applicable agency grievance rights and allegation of discrimination appeal rights; and
A statement that if performance improves to an acceptable level, the WGI will be granted effective the first day of the first pay period following its actual approval and certification.
An employee shall be entitled to choose a representative, provided the representative is not an individual whose activities as a representative would cause conflict of interest or position, whose release from his or her official position for representation duties would give rise to unreasonable cost to the Service, or when priority work assignments would preclude such release from official duties.
When it is determined that a request for a particular representative must be disallowed, the servicing Labor Relations office will be consulted. A notice for disallowance of a representative will be issued within 5 workdays after receipt of the designation of a representative. It will specify the basis for the disallowance. If the disallowance is made for reasons of conflict of interest or position, the letter must explain how the conflict exists. It is insufficient to state: "Your representative is being disallowed because of conflict of interest."
The servicing Labor Relations office will send a copy of the disallowance to the Human Capital Office, Workforce Relations Division, within 5 workdays of the date of the decision to disallow the representative.
Should the grievant wish to appeal the disallowance of the representative determination, the appeal must be submitted in writing within 7 workdays after receipt of the disallowance decision to the Director, Workforce Relations Division. The decision denying the selected representative must be attached to the appeal. The Director will make a final decision regarding the disallowance within 15 workdays of the date of receipt of the grievant's appeal.
After the withholding of a WGI, at such time the employee's performance reaches an acceptable level of competence, the WGI will be granted. At a minimum, an acceptable level of competence determination must be made after each 52 calendar weeks following the original due date for the WGI.
A negative subsequent determination after the 52 calendar weeks does not require a 60-day warning notice. In effect, a negative subsequent determination is a reaffirmation of the initial negative determination and is subject to the same reconsideration rights as the original determination.
Except as provided in paragraph (3) of this subsection, a WGI is effective on the first day of the first pay period following the completion of the required waiting period.
Thus, an employee temporarily promoted for not-to-exceed 1 year may complete 52 weeks of service at the temporary grade but will not earn the WGI unless the temporary promotion is extended through at least the 27th pay period.
When an acceptable level of competence is achieved at some time after a negative determination, the effective date is the first day of the first pay period after the acceptable determination has been made.
This guidance must be applied in conjunction with the provisions at 5 CFR 531, subpart E, and IRM 6.451.1 .
The definitions used in this section are the same as the definitions at 5 CFR 531.502.
A QSI provides appropriate incentive and recognition for ongoing excellence in performance by granting a faster than normal step increase. It is used to recognize exceptional performance and is a tool to motivate employees to continue that high level of accomplishment in their position of record.
A QSI shall not be required, but may be granted only to an employee who receives an "outstanding" or equivalent rating, and the superior level of performance is expected to continue in the current position.
Reference IRM 6.451.1 for specific guidance regarding IRS policy.
A QSI should be effective as soon as practicable after it is approved. A QSI will not be effected retroactively unless an appropriate authority determines that an administrative error occurred which caused the increase not to be provided timely. (See provisions of the Back Pay Act at 5 CFR 550, subpart H.)
A QSI will be documented and processed under the procedures established by Agency-Wide Shared Services, Employee Support Services.
A QSI will be documented and reported to the Central Personnel Data File in compliance with the OPM procedures.
Evaluation of QSI authority: The OPM may evaluate IRS's use of this authority and can require IRS to take corrective action if appropriate.
This guidance must be applied in conjunction with the provisions at 5 CFR 531, subpart F.
The definitions used in this section are the same as the definitions at 5 CFR 531.602.
Locality pay areas are listed in 5 CFR 531.603 and posted on the OPM website at http://www.opm.gov/oca/07tables/locdef.asp.
An employee's locality rate is determined by:
An employee's official worksite (see 6.522.214.171.124);
The locality pay area in which the employee's official worksite is located, consistent with 5 CFR 531.603;
Identifying the locality pay percentage in effect in the applicable locality pay area;
Increasing the employee's underlying rate of basic pay by the applicable locality pay percentage and rounding the result to the nearest whole dollar ($.50 and higher rounds up); and
Applying any applicable limitation as described in 5 CFR 531.606.
The official worksite is the location of an employee's position of record where the employee regularly performs his or her duties. If the employee's work involves regular travel or the work location varies on a daily basis, the official worksite is the location where the work activities of the employee's position of record are based, as determined by the IRS, subject to the requirement that it must be in a locality pay area in which the employee regularly performs work.
The official worksite is defined as a building in which the IRS occupies space and may not be the employee's home or another location not occupied by the IRS.
Telework guidance is contained at the following site: http://hco.web.irs.gov/compbenefits/wlprog/flexiplace/ .
Employees on a telework agreement must report to the official duty station at least 2 days each pay period; or, if the work location varies on a recurring basis, they must regularly perform work within the locality pay area for the worksite.
Managers may authorize an exception to the requirement in 3(a) for an appropriate temporary situation such as:
• An employee who is recovering from an injury or medical condition;
• An employee is affected by an emergency situation which temporarily prevents the employee from commuting to the official worksite;
• An employee has an extended approved absence from work;
• An employee is in temporary duty travel status away from the official worksite; or
• An employee is temporarily detailed to work at a location other than a location covered by a telework agreement.
For an employee who is relocated and authorized to receive relocation expenses under 5 U.S.C. chapter 57, subchapter II, the official worksite is the established worksite for the position in the area to which the employee has been relocated. This includes employees on long-term temporary assignments where relocation expenses were authorized.
Temporary changes which impact worksite and locality:
A long-term assignment, as noted in (4) above;
For an employee who is temporarily promoted to a position in a different geographic area, the official worksite is the location of the temporary position (which also impacts locality pay entitlement).
Temporary changes which do not impact worksite and locality:
Details, even if the worksite changes.
For an employee whose assignment to a new worksite is followed within 3 workdays by a reduction in force resulting in the employee's separation before he or she is required to report for duty at the new location, the official worksite in effect immediately before the assignment remains the official worksite through the date of separation.
An employee's official worksite is documented on his or her SF-50, Notification of Personnel Action, in blocks 38 and 39.
For information on computing hourly, daily, weekly, and biweekly rates, see 5 CFR 531.607. Tables listing hours locality rates can be found at http://www.opm.gov/oca/09tables/indexGS.asp .
An employee must receive the greatest of the following rates of pay, as applicable:
The scheduled annual rate of pay;
A locality rate under this section;
A special rate; or
A retained rate.
The employee is entitled to the higher of the locality rate or the special rate. When an employee's locality rate exceeds a corresponding special rate, the employee's entitlement to the special rate is terminated.
Employees on a retained rate of pay (i.e., pay retention) are not entitled to an additional locality payment. Any applicable locality rate is already included in the retained rate.
When an employee's official worksite is changed to a different locality pay area, the employee's entitlement to the new locality rate begins on the effective date of the change in official worksite. (See 5 CFR 531.609.)
The geographic conversion rule will apply when an employee becomes covered by one or more pay schedules because the employee will be assigned to an official worksite in a different locality area. The employee's pay must be converted to the applicable pay schedule in the new location before applying any other pay action (other than a general pay adjustment).
A locality rate is considered to be an employee's rate of basic pay for the purpose of computing or applying:
Retirement deductions, contributions, and benefits;
Life insurance premiums and benefits;
Advances in pay;
Post differentials and danger pay allowances;
Recruitment, relocation, and retention incentives, supervisory differentials, and extended assignment incentives;
Performance-based cash awards, when those awards are computed as a percentage of an employee's rate of basic pay;
GS pay administration provisions; e.g., GS promotion provisions;
Pay administration provisions for prevailing rate employees which consider rates of basic pay under the GS pay system in setting pay;
Lump-sum payments for accumulated annual leave; and
Grade and pay retention, to the extent provided by 5 CFR part 536.
A locality rate may be paid only for those hours for which an employee is in a pay status.
Payment of, or an increase in, a locality rate is not an equivalent increase in pay. (See 5 CFR 531.407(c).)
A locality rate is included in an employee's total compensation, as defined in 5 CFR 551.511(b), and straight-time rate of pay, as defined in 5 CFR 551.512(b), for the purpose of overtime pay computations under the Fair Labor Standards Act.
A reduction or termination of a locality rate is not an adverse action and is not the basis for pay retention under 5 CFR 536.