DoD issues rules setting up new pay, personnel system for cyber workforce

The Defense Department has published long-awaited regulations to implement a new personnel system for the civilian members of its cyber workforce, saying the new policies are intended to make the military’s various components “employers of choice” for top cyber talent.

Congress first authorized the new Cyber Excepted Service in December 2015 to give DoD broader flexibilities to hire, fire and pay employees with critical cyber skills. And while DoD initially said it intended to apply the authorities only to “high-end” operators, the final plan incorporates a broad range of occupations, ranging from entry-level technical administrative employees to senior managers.

In many ways, the new personnel structure closely resembles the civil service system that already governs the vast majority of the federal civilian workforce. It incorporates existing federal laws in Title 5, such merit system principles, prohibited personnel practices, equal employment opportunity and prohibitions against nepotism. Veterans preference would still apply, and pay rates would be linked to the General Schedule.

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But it also differs from the traditional system in several respects.

For instance, when recruiting employees for a position that’s been designated for the Cyber Excepted Service (CEP), DoD can advertise the job via “any legal means.” Those means can include the usual USAJobs.gov website, but they do not have to. Job fairs, campus recruiting events and external cybersecurity community websites are specifically called out in the new policy as acceptable alternatives.

Also, employees who take jobs in the CES will be subject to a three-year probationary period rather than the two years that became standard for all new Defense hires late last year. All members of the CES will have to sign agreements stating that they understand that they are part of the excepted service — not the competitive service — and can be demoted or removed at any time if they violate the terms and conditions of employment that are set by whichever military component for which they’re working.

The rules also give DoD slightly broader authority to hire term employees into cyber positions than is granted to most other agencies. Those workers could be hired for up to five years at a time without having to compete with other candidates, part of a policy objective the department says is designed to “facilitate the development of talent exchange programs, consistent with law, with the private sector to bring measurable benefits to DoD to meet mission requirements.”

Some of the on-the-ground realities of how the new workforce framework will actually operate are yet to be determined, because each military department and Defense agency must still draw up its own rules for how they will implement the high-level guidance DoD issued for the CES.

Among other things, those decisions will influence precisely which existing positions are converted to the excepted service. The Defense instructions say the CES is only to be made up of workers who “perform, manage, supervise, or support functions necessary to execute the responsibilities of the United States Cyber Command,” but it’s up to DoD component heads to recommend to the DoD chief information officer precisely which jobs meet that definition.

As far as compensation, each DoD organization will be able to make its own decisions about whether to structure its pay system for CES workers in “bands,” or the more typical grade-and-step system that prevails throughout most of the federal workforce today.

In either case, basic pay rates will be pegged to the General Schedule, but members of the CES will get a pay bump equivalent to two steps within their grade.

“DoD components will share an overarching compensation architecture intended to support the DoD goal of facilitating interchange of personnel across the DoD components in the interest of expanding individual perspective in solving cyber problems,” Defense officials wrote in an appendix describing the philosophy behind the pay system. “The shared compensation architecture will consider DoD human capital initiatives, thereby facilitating the exchange of personnel within the larger cyber community and further increasing individual perspective in problem-solving.”

The new system also introduces “Local Market Supplements.” Fundamentally, the LMS will operate the same way locality pay increases do for GS employees, except that the DoD CIO has broad authority to tweak those locality pay areas for the purposes of CES employees — including by subdividing them in order to offer higher bonus payments to smaller, more discrete slices of geography than are delineated by the Office of Personnel Management’s current maps of the employment market.

Additionally, the CES provides for an even more surgical approach to compensating workers in high-demand areas, called Target Local Market Supplements (TLMS). That concept lets DoD offer extra pay to employees that are both in geographic areas and in high-demand career fields, those “that require separate interventions to ensure that qualified employees can be hired and retained in support of the cyber mission.”

The LMS and TLMS rates will be set each year by the DoD CIO and the undersecretary of personnel and readiness. Defense components will be able to offer either LMS or TLMS to their employees on top of their base pay, but not both.

Kate Charlet, who retired from DoD this summer after having last served as the acting deputy assistant secretary for cyber policy, said that at least one of the objectives of the new rules was to let the department do a better job of recruiting and retaining the people it sees as providing continuity within the cyber workforce.

“The flexibility is very important in an area where you have a lot of military service members, a lot of positions that move through every two-to-three years. Having a civilian backbone of folks who are there for a longer period of time and can bring the institutional memory and others who can bring outside skill sets is a very valuable thing,” said Charlet, who is now a program director at the Carnegie Endowment for International Peace. “From a strategic perspective, having the excepted service hiring authorities is very positive.”

Once DoD and its various organizations decide which of the department’s existing positions will become part of the excepted service, the employees occupying those jobs will be given a one-time option of staying within the traditional pay and personnel system or moving into the new one.  No currently serving workers can be forced into the CES.

“If an employee declines to voluntarily convert to CES, the CES-designated position will be converted to CES when vacated by that employee, the instructions said. “An employee’s decision to decline an offer to convert voluntarily to the excepted service will be final, although the employee may compete for other positions in CES.”

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