Agencies have a chance to propose new special salary rates, but budget uncertainty can cause hesitation

The Office of Personnel Management is making preparations ahead of a pending pay raise for civilian federal employees in 2024.

Agencies have one month to submit any requests to OPM where they want to offer higher salaries for typically hard-to-fill federal positions.

Every fall, OPM sets a deadline for agencies to submit special salary rate (SSR) requests to take effect the following year. If they choose to, agencies can recommend positions to receive an SSR outside of the likely, but not yet official, pay raise for most civilian federal employees on the General Schedule (GS).

OPM can then decide whether to authorize those special salary rates for certain roles, grades or locations where agencies find it particularly difficult to hire.

The goal is to help alleviate “significant recruitment and retention challenges,” OPM said in a memo to chief human capital officers Tuesday.

“The cost of using these flexibilities should be weighed against the benefits to be gained in supporting agency mission and program needs,” OPM Director Kiran Ahuja said in the memo.

But OPM’s call for agencies’ SSR requests comes among uncertainty over the implementation of the government’s newest SSR. Earlier this year, OPM approved a higher pay rate for certain federal cyber and IT positions.

The SSR would cover employees working in 2210 IT management, 0854 computer engineering and 1550 computer science classified positions. If all agencies adopted the new rates, the SSR would increase pay for roughly 100,000 federal IT and cyber employees governmentwide.

So far, though, the Department of Veterans Affairs is the only agency that has agreed to implement the higher rate for an estimated 7,000 employees nationwide.

Aside from VA, just a small handful of other agencies have opted to implement similar raises for IT and cyber positions. Cyber employees in the Defense Department’s Civilian Intelligence Personnel System saw a higher rate approved in May. Similarly, the Department of Homeland Security’s Cyber Talent Management System lets DHS pay some cyber workers at higher rates.

But with government funding levels still highly uncertain for fiscal 2024, former Federal Salary Council Chairman Ron Sanders said unlike these few examples, the vast majority of agencies cannot plan ahead and many may hesitate to consider new SSRs for certain positions.

“Agencies are going to hedge,” Sanders, an expert on federal workforce issues, said in an interview. “You’re already seeing this with the implementation of the special salary rates for cyber and related IT jobs that OPM just approved. The reason that agencies are so risk-averse is that special salary rates may or may not be baked into their base budgets. They all have to answer the question of affordability.”

And that creates an uneven playing field between agencies who can implement the SSRs — and those who can’t, Sanders added.

Generally, special salary rates are adjusted by either a set dollar value or a percentage of an employees’ base pay. OPM also periodically reviews these rates to see if they should be terminated, reduced or increased based on recent staffing considerations.

Agencies that are looking to request an SSR above the 2024 GS base pay level should submit additional staffing data, OPM said. And those requesting rate adjustments below the standard base pay should also send OPM a written justification and any supporting data.

For agencies looking to get higher rates approved for 2024, they need to request the SSRs by Oct. 13. And if OPM approves a request, the authorization would take effect in January.

OPM also provides an index of federal positions with SSRs, including a wide range of jobs, from park rangers, to law enforcement officers, firefighters and more.

But Sanders said he would be surprised if agencies do ask for more special salary rates.

“In most cases, agencies’ budgets are uncertain and they don’t know whether they’re going to be able to afford them,” he said.

Adding to the issue, many federal organizations have said the government’s main pay system is outdated and inherently flawed. For example, under the General Schedule, the government doesn’t differentiate pay based on occupation. That means some employees are underpaid while others may be overpaid when comparing with the broader market, Sanders said.

“We need a pay system that doesn’t require an annual special salary rate call, and in the case of cyber, one that lets agencies pay the SSR only if they can afford it — and if they can’t, then not,” Sanders said. “That’s just a very haphazard way of approaching compensation for what are clearly mission-critical jobs.”

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