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1 1 (April 3, 2020)

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April 3, 2020


Federal Executive Agencies: Selected Pay Flexibilities for

COVID-19 Response


On January 31, 2020, Secretary of Health and Human
Services Alex Azar declared a public health emergency for
the United States in response to Coronavirus Disease 2019
(COVID-19). To assist the federal government in
responding to the emergency, Congress passed legislation
that provides exemptions from certain pay limitations for
employees in certain executive departments. In addition, the
U.S. Office of Personnel Management (OPM) notified
executive agency heads about the procedures for requesting
a salary offset (dual compensation) waiver for the
reemployment of individuals in emergencies or other
unusual circumstances without reduction or termination of
annuity. OPM also reiterated long-standing guidance on
executive agency pay flexibilities that are codified in Title 5
of the United States Code and Title 5 of the Code of
Federal Regulations.


Generally, federal agencies must abide by limitations on the
dollar amount employees may receive in compensation for
work performed during a pay period or on an annual basis.
Under Title 5, Section 5547(a), of the U.S. Code, the
combination of an employee's basic pay and premium pay
for any pay period cannot exceed the rate of basic pay for
GS-15, step 10 (including any locality pay, special pay, or
similar pay rate) or the rate for Level V of the Executive
Schedule (currently, $160,100), whichever is greater. OPM
regulations codified at Title 5, Section 550.103, of the Code
of Federal Regulations define premium pay as the dollar
value of earned hours of compensatory time off (i.e., comp
time) and additional pay authorized by Title 5, Chapter 55,
Subchapter V, of the U.S. Code and Title 5, Part 550,
Subpart A, of the Code of Federal Regulations for
overtime, night, Sunday, or holiday work or for standby
duty, administratively uncontrollable overtime work, or
availability duty. Overtime pay is pay for hours of work
officially ordered or approved in excess of eight hours in a
day or 40 hours in an administrative workweek. Premium
pay does not include overtime pay under the Fair Labor
Standards Act and compensatory time off earned in lieu of
such overtime pay.

Under recent legislation enacted in response to COVID-19,
additional pay flexibilities were provided to the Department
of Homeland Security (DHS). Division B, Title VI of P.L.
116-136, the Coronavirus Aid, Relief, and Economic
Security (CARES) Act, as enacted on March 27, 2020,
applies to the activities of DHS. Section 16003 in that title
provides an exemption from the limitation on the
combination of basic and premium pay that is codified at
Title 5, Section 5547(a), of the U.S. Code and any other
provision of law limiting the aggregate amount of premium
pay that is payable on a biweekly or calendar year basis.


This provision of additional flexibility is effective as if
enacted on January 1, 2020, and applies to any premium
pay that is funded, either directly or through
reimbursement, by the Federal Emergency Management
Agency (FEMA). For the exemption to be applied, the
agency head must determine that services performed by an
employee during FY2020 are related primarily to
preparation, prevention, or response to coronavirus. In
addition, any overtime that is funded by FEMA for such
services, either directly or through reimbursement, is to be
exempted from any annual limitation on the amount of
overtime that is payable in a calendar year or fiscal year.

In addition to providing exemptions from certain pay
limitations, the CARES Act increases caps set for annual
pay earned by DHS employees. In determining whether an
employee's pay exceeds the applicable limitation on the
annual rate of basic pay payable under Title 5, Section
5307, of the U.S. Code, the agency head is not to include
pay exempted under Section 16003. Pay exempted from the
otherwise applicable limitations on basic and premium pay
shall not cause the aggregate pay earned for the calendar
year in which the exempted pay is earned to exceed the rate
of basic pay payable for Level II of the Executive Schedule
(currently $197,300).

Division B, Title VIII of P.L. 116-136 involves the
activities of the Departments of Labor, Health and Human
Services, and Education. Section 18110 of that title
provides the same exemptions from the pay limitations as
Section 16003 (but does not include the stipulation related
to FEMA funding). The law provides that

    If services performed by an employee during fiscal
    year 2020 are determined by the head of the agency
    to be primarily related to preparation, prevention, or
    response to coronavirus, any premium pay for such
    services shall be disregarded in calculating the
    aggregate of such employee's basic pay and
    premium pay for purposes of a limitation under
    section 5547(a) of title 5, United States Code, or
    under any other provision of law, whether such
    employee's pay is paid on a biweekly or calendar
    year basis.
If application of the section results in the payment of
additional premium pay to an employee of a type that is
normally creditable as basic pay for retirement or any other
purpose, the additional pay is not to be considered basic pay
for any purpose or be used in computing a lump-sum
payment for accumulated and accrued annual leave under
Title 5, Sections 5551 or 5552, of the U.S. Code. The
provision took effect as if enacted on February 2, 2020.


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