HRPAY 21-01, Annual Pay Raise

Published: January 8, 2021
Effective: Pay Period 01, 2021

Summary

The National Finance Center (NFC) will be processing the 2021 Federal pay raise in accordance with the Office of Personnel Management (OPM) guidelines as described below.

Implementation

This bulletin contains the following sections:

1. Federal Pay Increase
2. Special Rate Supplement
3. Law Enforcement Officers Covered by the GL Pay Plan
4. Locality Pay
5. Life Insurance Coverage
6. Personnel Action Processing Information
7. Availability of Standard Form 50B, Notification of Personnel Action
8. Additional Information

1. Federal Pay Increase

Executive Order Number 13970, dated December 31, 2020, authorizes an average 1 percent increase effective January 3, 2021, for employees under the General Schedule (GS) and Foreign Service Schedule statutory pay systems.

Note: Agencies should reference OPM Compensation Memoranda (CPM) memos for detailed information.

By law (5 United States Code (U.S.C.) 5318), the rates for Levels I through V of the Executive Schedule (EX) (EX-I through EX-V) will increase by 1 percent (rounded to the nearest $100). Under Executive Order Number 13970, the President has also authorized an increase in the rates of basic pay for Administrative Law Judges (ALJ) of 1 percent (rounded to the nearest $100). The rate of basic pay for Administrative Law Judge (AL) AL-1 will be $172,500. The rate for AL-2 will be $168,200. The rate of basic pay for AL-3/A through AL-3/F will range from $115,100 to $159,400. The rates for Administrative Appeals Judges (AAJ) are directly linked to those of ALJs (see 5 U.S.C. 5372). Therefore, the rate of basic pay for AA-1 through AA-6 will also range from $115,100 to $159,400.

Pay rates for certain other employees are linked to the Executive Schedule. The rates of basic pay for Board of Contract Appeals (BCA) members are calculated as a percentage of the rate for Level IV of the Executive Schedule. Therefore, BCA rates of basic pay will increase by approximately 1 percent. The rate of basic pay will be as follows: Chairman $172,500, Vice-Chairman $167,325, and other members $162,150. In addition, the pay for the Inspector General (IG) at establishments (those covered by the IG pay plan) is also calculated as a percentage of the EX-III plus 3 percent, and thus will increase by approximately 1 percent. The IG pay plan rate will be $188,799.

The increase in Federal pay and any applicable locality-based comparability payments or special rate supplements for all eligible biweekly employees will be reflected in salary payments for Pay Period 01 (January 3, 2021, through January 16, 2021).

The Federal pay increase is outlined as follows:

Federal Pay Increases Not Processed for Pay Period 01, 2021

NFC will not process Federal pay increases for the following types of employees:

• Executives and Foreign Executives (e.g., employees in Pay Plans ES, FE, and SW)
• Experts and consultants (e.g., employees in Pay Plans CG, EC, ED, EE, EF, EG, EH, EI, and IC)
• Employees paid at statutory rates (i.e., employees in Pay Plan SR)
• Employees in Pay Plans AE, DB, FN, HA, IE, IM, IT, IH, OC, OF, PJ, PL, RA, RG, RS, RW, SB, SQ, SS, UT, VG, VH, YV, YW, ZA, ZP, ZS, ZT, and ZZ
• Employees who are being paid under Pay Rate Determinate (PRD) D, R, S, T, U, V, 2, 3, and 4

  Note: It is the Agency's responsibility to determine PRD T entitlement and usage of the PRD code. The guidance can be found at Modified Pay Freeze for Certain Senior Political Officials CPM 2021-04.

• Employees in Pay Plans GG, GS, GM, and GH who are being paid under cooperative agreements, and for whom the Federal Government does not pay all of the salary (the cooperator pays a portion or all of the salary)
• Employees with the PRD T will be bypassed in the Annual Pay Raise process

  Note: Employees who are Americorps members (Special Employment Programs Code V8) are not eligible to receive the 1 percent Federal pay increase.

NFC will not process Federal pay increases for the following employees (with the exception of employees in Agencies notifying NFC to automatically process the pay increase):

• Employees in Pay Plans AD, SL, and ST (pay adjustments for these pay plans are made at the discretion of the Department/Agency)

Federal Pay Increases Processed Automatically for Pay Period 01, 2021

NFC will automatically process Federal pay increases for the following types of employees:

• Employees in Pay Plans including but not limited to AA, AL, CA, CO, CP, DN, EX, FC, FO, FP, FS, GG, GH, GI, GL, GM, GS, GT, IG, IJ, IS, LE, LP, NF, NX, NY, NZ, PD, PG, PQ, PU, PZ, SP, SV, and TR
• Reemployed annuitants (The system will automatically generate pay adjustments for all reemployed annuitants. For any reemployed annuitant whose salary is offset by an annuity from the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS) (Annuitant Indicator Codes A, C, E, 1, 4, and 5), personnel offices must also prepare a 917 Nature of Action Code (NOAC) personnel action when OPM authorizes a cost-of-living adjustment (COLA) for CSRS and FERS retirement annuities. If COLA is authorized, the increased amount of the employee’s annuity must be recorded in the Annuitant Share Amount field.)
• Employees who are being paid under PRD code E, F, J, K, 5, or 6

  Note: Compensation for employees under PRD J and K will be calculated using the 50% increase computation (except those Agencies with their own computations) until their salary maxes out at the step 10 rate. In the case where the new computation falls in between steps, the Agency must process the action removing the PRD and entering the correct step.

2. Special Rate Supplement

For employees who currently receive a Special Salary Rate (SSR) supplement because their highest payable rate is currently from an SSR table, it is important to remember that in the event that the locality rate in the employee's area exceeds his/her SSR supplement entitlement, the employee will cease to be covered by the SSR table and will instead be entitled to the higher locality rate. NFC will implement this for entities for whom it is generating the pay raise. Agencies will be responsible for handling this function for any pay raise action that the Agency processes.

Note: For those SSR tables applicable to more than one geographic area, it is possible for a grade and step to remain active on the SSR even though that rate is superseded by locality pay in some of the coverage area(s). In these instances, employees in areas with higher locality pay would cease to be covered by the SSR.

SSR tables have been updated to incorporate the 1 percent general increase. See the OPM Web site for a list of these SSR tables.

• No Special Rate tables will be changed based on the OPM annual review of special rates, and no additions of new SSR schedules.

3. Law Enforcement Officers Covered by the GL Pay Plan

Employees that were converted from GS to GL and are now using the Law Enforcement Officer (LEO) pay table code will have actions generated by NFC. For those GL employees for whom the 2021 pay increase will remove their entitlement to an SSR supplement, NFC will still process NOAC 894, Pay Adj. However, NFC will remove PRD 6 from the employee’s record and replace the SSR Table in the Position Management System Online (PMSO) with LEO, which is the LEO special base rate table code.

4. Locality Pay

The locality rate of pay for GS employees may not exceed the rate payable for Level IV of the Executive Schedule ($172,500 in 2021). As a result of the pay increase in 2021, the locality rates for GS-14/10, GS-15/05, GS-15/06, GS-15/07, GS-15/08, GS-15/09, and GS-15/10, in the San Jose-San Francisco-Oakland locality area; the locality rates for GS-15/06, GS-15/07, GS-15/08, GS-15/09, and GS-15/10 in the New York locality areas; the locality rates for GS-15/07, GS-15/08, GS-15/09, and GS-15/10 in the Houston, Los Angeles, and Washington-Baltimore localilty areas; the locality rates for GS-15/08, GS-15/09 and GS-15/10 in the Alaska, Boston, Chicago, Denver, Detroit, Hartford, San Diego, and Seattle areas; GS-15/09 and GS 15/10 in the Dallas-Fort Worth, Miami, Minneapolis-St Paul, Philadelphia, Portland, and Sacramento locality areas; and the locality rates for GS-15/10 in the Atlanta, Buffalo, Cincinnati, Cleveland, Milwaukee, and Raleigh locality areas would otherwise exceed Level IV rate. Therefore, the identified grades and steps in the applicable locality areas are limited to $172,500 for 2021.

Federal Employees Pay Comparability Act of 1990 (FEPCA) (Public Law 101-509) provides for comparability payments within each locality that is determined to have a pay disparity of greater than five percent with non-Federal workers.

The President’s Pay Agent has determined that the 2021 Locality-Based Comparability payments will be the same as the Government-wide and single-Agency categories that were authorized for the 2020 Locality-Based Comparability Payments.

Changes to locality pay are outlined below.

Locality Pay Areas

The total number of locality pay areas is 54 for 2021. There was one new locality pay area established in 2021, for Des Moines-Ames-West Des Moines, IA; and Imperial County, CA, is now included in the Los Angeles-Long Beach, CA, locality pay area. Locality pay area definitions are posted on OPM's Web site at https://www.opm.gov/policy-data-oversight/pay-leave/salaries-wages/2021/locality-pay-area-definitions/.

The percentage factor for each locality is based on the geographic location of the employee’s official duty station. The areas designated as locality pay areas for 2021, along with the corresponding percentage factor for each area, are shown in the table below.

Locality and COLA Rates

Alaska

Hawaii

Locality Pay

Note: Information about the geographic scope of each locality pay area can be found on OPM’s Web site at www.opm.gov under Salaries and Wages.

Locality payments will be paid as part of the employee’s biweekly salary and will be used in determining the calculations for retirement annuity and contributions to the Thrift Savings Plan (TSP), life insurance, overtime, and other premium pay. For most employees, the amount of locality pay will be determined by multiplying the employee’s scheduled annual rate of pay by the percentage factor for the locality pay area.

Employees Ineligible to Receive Locality-Comparability Payments

The following groups of GS employees do not receive locality-based comparability payments because they are already receiving pay rates that exceed locality:

• Effective May 1, 2006, employees in retained pay (i.e., employees with PRD codes J, K, R, U, or V) were no longer eligible for locality pay. The appropriate pay increase for these individuals must be processed in accordance with OPM guidance for employees on pay retention.
• Employees entitled to a special salary rate supplement that exceeds the locality pay for their pay area are not eligible for locality pay.

  Note: Under 5 U.S.C. 5305(a)(1), the maximum special rate to the rate payable for Level IV of the Executive Schedule is $172,500 in 2021. There are 435 capped special rates in 2021; and these are shown on a special rate table and on OPM's CPM 2021-03, Update to Annual Review of Special Rates. Capped special rates are listed in the table below.

Capped Special Rates for 2021

5. Life Insurance Coverage

If there is an increase in the regular life insurance coverage as a result of the pay increase, the related increase in life insurance deductions will be effective at the same time.

6. Personnel Action Processing Information

OPM does not require a separate personnel action for those employees who receive a locality payment or SSR supplement increase along with the Federal pay increase authorized under 5 U.S.C. 5303. Therefore, NFC will automatically generate one personnel action for both the Federal pay increase and locality-based comparability payment/SSR-supplement increase.

In addition to the standard items required for a salary change, the personnel action must include the following data for a salary change personnel action:

• The effective date of the new rate (i.e., January 3, 2021)
• The 2021 scheduled salary rate (Do not include the locality-based comparability payment. The Payroll/Personnel System (PPS) will automatically increase the salary amount for employees who are entitled to receive locality pay.)
• NOAC 894, QWM, ZLM, Reg 531.207, and Executive Order Number 13970 for GS employees (e.g., GS, GL, GM, etc.)
• NOAC 894, ZLM, QUB, Executive Order Number 13970; and Reg 530.303(d) for a GS/GL employee whose locality rate exceeds his/her special salary rate (The employee's PRD code will be changed to 0, and the SSR pay table code will be removed from the PMSO record.)

  Note: For employees in the GL pay plan, the SSR pay table code in PMSO will be replaced with the Law Enforcement Officer pay table code of LEO.

• NOAC 894, ZLM, Reg 534.504; and Executive Order Number 13970 for Pay Plans SL and ST, if requested by the Agency
• NOAC 894, ZLM, and the authority cited by the Agency for Pay Plan AD, if requested by the Agency

  Note: Agencies with special authorities must use the authority specific to their Agency. For detailed instructions, refer to OPM's Guide to Processing Personnel Actions (GPPA), Chapter 17.

• NOAC 894, for PRD 7, with the PRD changed to 0
• NOAC 894, VGR, including spaces for the second code, not the standard NOAC 894, QWM, ZLM (The authority is the same E.O. 13970 with Authorization Date of December 31, 2020)
• Authentication date of the Executive Order (e.g., December 31, 2020)

7. Availability of Standard Form 50B, Notification of Personnel Action

NFC will not print Standard Form (SF) 50Bs. The forms can be viewed online via an electronic Official Personnel File (eOPF) and the Remote Forms Queuing System (RFQS). SF 50Bs will run after the completion of processing for Pay Period 01, 2021.

8. Additional Information

Processing Personnel Actions in Pay Period 01, 2021

The general adjustments that take effect in January 2021 must be processed before any individual pay action (e.g., within-rate increase or promotion) that takes effect on the same date. General adjustments include across-the-board increases under 5 U.S.C. 5303 and increases in locality payments or other geographic adjustments, special rate supplements, and retained rates. If multiple individual pay actions become effective on the date of the January 2021 pay adjustment, those actions must be processed in the order applicable to the employee’s pay system (e.g., the simultaneous action rule for GS employees in 5 CFR 531.206).

Personnel Input and Edit System (PINE) Edit Messages

To avoid a system-generated rollback, Agencies should ensure that all personnel actions with effective dates prior to Pay Period 01, January 3, 2021, were entered before the processing of the first pass of PINE (on or before Sunday, January 17, 2021). Any rollback action will result in the rollback of all personnel actions (Agency-initiated or system-generated) that have applied in the current pay period, including the system-generated change in the service computation date (SCD) and the Federal pay increase/locality-based comparability. These actions are then placed in suspense and will appear on the Listing of Personnel Error Messages with Override Code F and with the edit message In Suspense Due To Rollback-Take Appropriate Action. The document(s) will remain in suspense until action is taken.

The system will produce Document Type 999 informational edit messages on the Listing of Personnel Edit Error Messages for Pay Period 01 to identify employees who did not receive an automatic pay raise (e.g., GM employees whose salaries are less than the minimum salary range for the step).

The first pass of PINE for Pay Period 01 will be executed on Sunday, January 17, 2021. Consult the NFC Electronic Access Bulletin Board on the NFC Mainframe or the NFC Home Page for updates on the processing of the pay raise actions and system availability.

ES/SL/ST Employees in Non-Foreign Areas

Employees assigned to ES/SL/ST positions in the non-foreign areas on or after January 3, 2010, are not eligible for locality pay (only the adjusted COLA, if any, in effect for their official duty station) if a covered ES/SL/ST employee reaches the applicable pay rate cap. If this occurs, the law provides that the employee will continue to receive the frozen COLA rate subject to an offset until the employee leaves the COLA area, the employee leaves the pay system, or the employee becomes entitled to receive a rate of basic pay (including locality pay) that exceeds the employee's existing COLA adjusted rate. The formula for calculating the adjusted COLA percentages is contained in OPM Memo, Subject: Non-Foreign Area Retirement Equity Assurance Act, CPM 2009-27, dated December 30, 2009. For these employees, COLA payments should not be placed on time and attendance (T&A) reports for payments, but should be submitted by the Agencies via the Web-based Special Payroll Processing System (SPPS Web). Any COLA amounts added to T&As will be paid via Table Management System Table 027 (the standard COLA-reduced rates for employees in the non-foreign areas).

Suspense Documents

Documents that are processed by NFC for the annual pay raise will not appear under any of the Agency’s normal user identification (ID) on suspense reports. It is especially critical at this time of year for Agencies to verify all documents in suspense, not just those of individual human resources staff members. Failure to work an NFC-generated pay raise personnel action that falls into suspense for any reason will prevent the employee from receiving his/her January pay adjustment. If an Agency deletes an NFC-generated pay raise personnel action from suspense, then the Agency will have to generate a replacement action manually.

History Correction

If a History Correction package is processed during Pay Period 01, 2021, the system-generated personnel actions (e.g., the change in SCD and the Federal pay increase/locality-based comparability payment) will become part of the package. Special measures should be taken to ensure that these system-generated personnel actions were reapplied during Pay Period 01 regardless of whether the package is subsequently deleted.

Note: The system will hold history correction processing for the first pass of PINE for Pay Period 01 only.

Inquiries

For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at 1-855-NFC-4GOV (1-855-632-4468) or via the customer service portal.