“The pay freeze is expected to apply to approximately 2 million federal civilian employees in the Executive branch,” Berry wrote. “Employees 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). Covered employees include employees under the General Schedule, Executive Schedule, Senior Executive Service (SES), Senior Foreign Service (SFS), senior-level and scientific and professional (SL/ST), prevailing rate, and other Executive branch pay systems and schedules.”
Additional payments, such as performance awards/bonuses; recruitment, relocation, and retention incentives; and premium payments (e.g., overtime pay), are not affected by the pay freeze and must be paid in accordance with requirements and limitations in law, regulations, and agency policy. The Office of Management and Budget (OMB) will provide explicit guidance to agencies on FY 2011 and 2012 expenditure levels.
Promotions, periodic within-grade step increases based on fully successful level of performance, and quality step increases for outstanding performance are not affected by the pay freeze. Agencies should pay special attention to make sure these pay increases are based on performance and thus are not automatic, across-the-board increases.
Adjustments in foreign areas to maintain a constant salary rate in U.S. dollars or local currency or to respond to foreign labor laws are not affected by the pay freeze.
Pay-setting flexibilities, such as the GS superior qualifications and special needs pay-setting authority for newly appointed employees under 5 CFR 531.212 and the GS maximum payable rate rule under 5 CFR 531.221, are not affected by the pay freeze.
The memo also stated the pay freeze doesn’t apply to any increases that are required by current collective bargaining agreements.
“Each agency should consider the policy contained in the Presidential memorandum and consult with agency counsel to determine the agency’s position in any collective bargaining that may occur going forward,” the memo said.