Federal pay freeze Q&A

Tuesday - 1/4/2011, 5:48am EST

The federal pay freeze has officially been signed into law. So, what happens next?

Many questions remain about the implementation of the pay freeze. More guidance from the Office of Personnel Management is expected in the next few weeks.

You've been emailing Federal News Radio with your questions about the pay freeze. We've put together a list of your most commonly asked questions and the answers to them.

If you have a question that isn't addressed below or isn't answered in our pay freeze story, please email us or post a comment and we'll do our best to get an answer for you.

We will continue to answer your questions in this space, so check back often to see what's new.

For complete coverage from Federal News Radio on the proposed federal pay freeze and pay debate in general, click here.

Unanswered Questions:
Federal News Radio continues to work on answers to the following questions.

  • How will the pay freeze affect employees under the National Security Personnel System (NSPS)?
  • How will the pay freeze affect hiring?

January 4, 2011 Update:

    The Office of Personnel Management has issued a memo further detailing the pay freeze, which is now in effect, and for the first time also provided exclusions to the pay freeze. According to OPM's memo: "[e]mployees of the United States Postal Service and the Postal Regulatory Commission are not covered, nor are members of the uniformed services (as defined in 37 U.S.C. 101(3), i.e., Army, Navy, Air Force, Marine Corps, Coast Guard, National Oceanic and Atmospheric Administration, and Public Health Service). Except for Legislative branch employees covered by the General Schedule, the pay freeze legislation does not apply to employees outside the Executive branch."

    Q: What impact will the pay freeze have on raises negotiated under collective bargaining agreements?
    A: The pay freeze will not affect any pay raises required by current collective bargaining agreements. The OPM memo states, "The pay freeze policy in the Presidential memorandum may not, as a matter of Federal sector labor law, apply to any increase that is required by a collective bargaining agreement that has already been executed and is in effect as of the date of the Presidential memorandum."

    Q: Are performance awards/bonuses affected by the pay freeze?
    A: No. According to the OPM memo: "[e]mployees may continue to receive additional payments such as performance awards/bonuses; recruitment, relocation, and retention incentives; and premium payments (e.g., overtime pay)."

December 23, 2010 Update:

    The White House has issued a memo with more details on the pay freeze, which will go into effect on January 1, 2011. According to the memo, "[t]he Act freezes statutory pay adjustments for all executive branch pay schedules for a two-year period." OPM provided the adjusted rates of pay.

    Q: Are performance-based pay systems affected by the pay freeze?
    A: Yes. According to the memo released by the White House, the Act "generally prohibits executive departments and agencies from providing any base salary increases at all to senior executives or senior level employees, including performance-based increases." It goes on to say, "To the extent that an agency pay system provides performance-based increases in lieu of general increases, funds allocated for those performance-based increases should be correspondingly reduced to reflect the freezing of the employees' base pay schedule."

    Q: Will federal employees still be eligible for within-grade step increases?
    A: Yes. The Office of Management and Budget tells Federal News Radio that feds will still be eligible for step increases and the increase in pay that comes with those step increases. (See Pay Rate chart.)

December 22, 2010 Update:

    The pay freeze was passed by Congress on Dec. 21, 2010 as part of the continuing resolution. More guidance on the implementation of the pay freeze should be forthcoming in the next few weeks from the Office of Personnel Management.

    See how the pay freeze is worded in the continuing resolution by clicking here (Pages 1-2, SECTION 1, SUBSECTION 147).

December 20, 2010 Update:

    Q: How will the proposed pay freeze make its way through Congress?
    A: The pay freeze is now a part of the continuing resolution being considered by the Senate. The Senate is expected to vote on the CR Tuesday, Dec. 21. It would fund the government through March 4, 2011.

    Q: How will the pay freeze affect contractors?
    A: Some contractors are starting to feel the pain of the proposed pay freeze as well. Energy Secretary Steven Chu announced that his department will also freeze salaries and bonus pool increases of contractors who operate Energy's facilities. The freeze will cover 28 locations and 75,000 contractor workers. They perform maintenance, operations and research. The freeze for contractors would begin January 1, 2011.