Time-Limited Promotions, 89321-89327 [2023-28458]

Agencies

• Office of Personnel Management

[Federal Register Volume 88, Number 247 (Wednesday, December 27, 2023)]
[Proposed Rules]
[Pages 89321-89327]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28458]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 88, No. 247 / Wednesday, December 27, 2023 / 
Proposed Rules

[[Page 89321]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 335

[Docket ID: OPM-2023-0041]
RIN 3206-AO52


Time-Limited Promotions

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a proposed 
regulation to clarify that bargaining-unit employees, who are detailed 
or temporarily promoted to higher grade duties of a higher-graded 
position, should be paid accordingly for the entire time performing 
these duties of a higher-graded position, when this action is pursuant 
to a final order by an arbitrator, adjudicative body, or court, under a 
collective bargaining agreement that provides for this action and the 
employees were assigned these duties outside of competitive hiring 
procedures. In addition, the proposed change clarifies that non-
bargaining unit employees who are temporarily promoted to higher grade 
duties of a higher-graded position should be paid accordingly for the 
entire time performing these duties of a higher-graded position, as 
found pursuant to a final order by an adjudicative body or court. At 
present, non-competitive temporary promotions, and non-competitive 
details to duties of higher-graded positions are limited to no more 
than 120 days under OPM regulations regardless of the bargaining-unit 
status of the employee. Competitive procedures apply for any temporary 
promotion or detail to duties of a higher-graded position that exceeds 
120-days, again, regardless of the bargaining-unit status of the 
employee.

DATES: Comments must be received on or before February 26, 2024.

ADDRESSES: You may submit comments, identified by the docket number or 
Regulation Identifier Number (RIN) for this proposed rulemaking, via 
the Federal eRulemaking Portal: https://www.regulations.gov. Follow the 
instructions for sending comments.
    Instructions: All submissions must include the agency name and 
docket number or RIN for this rulemaking. Please arrange and identify 
your comments on the regulatory text by subpart and section number; if 
your comments relate to the supplementary information, please refer to 
the heading and page number. All comments received will be posted 
without change, including any personal information provided. Please 
ensure your comments are submitted within the specified open comment 
period. Before finalizing this rule, OPM will consider comments 
received on or before the closing date for comments. OPM may make 
changes to the final rule after considering the comments received.

FOR FURTHER INFORMATION CONTACT: Timothy Curry by email at [email protected] 
or by telephone at (202) 606-2930.

SUPPLEMENTARY INFORMATION:

I. Background

    On December 29, 1994, OPM issued interim regulations to maintain 
requirements under which agencies conduct merit promotion and internal 
placement programs in the competitive service.\1\ These requirements 
were in the provisionally retained chapter 335 of the former Federal 
Personnel Manual (FPM) and related issuances. Adopting the interim rule 
prevented a lapse in government-wide requirements when FPM chapter 335 
expired on December 31, 1994.\2\ The interim rule was effective on 
January 1, 1995. Agencies were authorized by 5 CFR 335.103 to promote 
competitive service employees to positions for which the agency had 
adopted and administered a merit promotion program. The promotion 
program had to conform with the standards and requirements that were in 
provisionally retained chapter 335 of the former FPM. This included the 
requirement that competitive procedures must be followed for time-
limited promotions for more than 120 days to higher-graded positions. 
This requirement still exists today.
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    \1\ 59 FR 67121 (Dec. 29, 1994).
    \2\ OPM abolished the FPM in December 1993, as recommended by 
the National Performance Review. FPM chapter 335 was kept 
temporarily through December 31, 1994, to enable OPM to incorporate 
promotion and internal placement requirements in the CFR.
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    The Federal Labor Relations Authority (FLRA) has found union 
proposals requiring the temporary promotion of bargaining unit 
employees officially assigned to a higher-graded position, or to the 
duties of a higher-graded position, for certain specified time periods 
are within the duty to bargain.\3\ The FLRA has further found that, 
under Federal personnel law, an employee may be entitled to a temporary 
promotion for performing the duties of a higher grade position for an 
extended period of time. However, the FLRA has emphasized that ``the 
entitlement must be based on a provision of a collective bargaining 
agreement or an agency regulation making a temporary promotion 
mandatory for details to, or the performance of the duties of, a 
higher-grade position after a specified period of time.'' \4\ As a 
result, some collective bargaining agreements between Federal agencies 
and unions have provisions requiring the temporary promotion of 
employees officially assigned to a higher-graded position or to the 
duties of a higher-graded position when such assignment is made without 
use of competitive procedures. As provided for in 5 U.S.C. 7121, 
disagreements on application and interpretation of such provisions are 
subject to negotiated grievance procedures that provide for binding 
arbitration.
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    \3\ See National Federation of Federal Employees v. Department 
of the Interior Bureau of Land Management, 29 FLRA 1491 (1987).
    \4\ See National Treasury Employees Union v. Department of 
Treasury Internal Revenue Service, 29 FLRA 348 (1987).
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    Prior to 2004, arbitrators awarded backpay to employees who filed 
grievances after being assigned to higher graded duties and were not 
temporarily promoted, and those awards were not time limited to 120 
days. For example, in Oklahoma City Air Logistics Center, Tinker AFB, 
OK and AFGE Local 9116, 42 FLRA 62 (October 1991), the arbitrator 
directed the agency to provide a grievant a retroactive temporary 
promotion, with backpay, for the entire period of time in which the 
grievant performed work of a higher-graded position. The grievant, a 
WG-8 employee, filed a grievance claiming he should have been promoted 
to the WG-

[[Page 89322]]

9 level. The arbitrator concluded the grievant was not wrongfully 
denied a permanent, competitive promotion to WG-9. The arbitrator 
found, however, the grievant ``was temporarily assigned the grade-
controlling duties of a WG-9'' employee from February 1987 to February 
1990. The arbitrator concluded the agency's failure to promote the 
grievant temporarily violated the parties' collective bargaining 
agreement and resulted in an unjustified or unwarranted personnel 
action. The arbitrator sustained the grievance, in part, and ordered 
the agency to make the grievant whole for the loss of WG-9 pay from 
March 29, 1987, to February 2, 1990. The decision was challenged to the 
FLRA. The FLRA stated, where parties to a collective bargaining 
agreement provide for the temporary promotion of employees assigned to 
perform the work of higher-graded positions, an arbitrator may order 
temporary promotions, with backpay, in accordance with that agreement. 
The FLRA modified the arbitration award and sustained the grievance in 
part finding the grievant must be made whole for loss of WG-9 pay for a 
2-year period beginning March 29, 1987. The FLRA directed the agency to 
request OPM to formally authorize the Agency to grant the grievant a 
retroactive temporary promotion, with backpay, from the end of the 2-
year period to February 2, 1990.
    Another example concerns U.S. Department of the Army, Fort Polk, 
LA, and the National Association of Government Employees, Local R5-168, 
44 FLRA 121 (1992). In this case, the employee filed a grievance 
claiming that, under the parties' collective bargaining agreement, the 
grievant was entitled to a temporary promotion for having performed the 
duties of a higher-graded position for an extended period of time. The 
arbitrator sustained the grievance and awarded the grievant a 
retroactive temporary promotion with backpay. The FLRA stated, in order 
to award backpay, an arbitrator must find (1) the aggrieved employee 
was affected by an unjustified or unwarranted personnel action; (2) the 
personnel action directly resulted in the withdrawal or reduction of 
the grievant's pay, allowance, or differentials; and (3) but for such 
action, the grievant otherwise would not have suffered the withdrawal 
or reduction. The FLRA found the arbitrator's award satisfied these 
requirements for the Back Pay Act. Specifically, the Authority found 
the arbitrator made a properly supported award of backpay under the 
Back Pay Act when the arbitrator determined the agency denied the 
grievant a temporary promotion to which the grievant was entitled for 
having performed the duties of a higher-graded position for an extended 
period of time. The award was modified to include the payment of 
interest on the award of backpay.
    Finally, in Social Security Administration and the American 
Federation of Government Employees, Local 220, 57 FLRA 115 (2001), the 
arbitrator found the agency violated the parties' collective bargaining 
agreement by failing to temporarily promote certain employees. One 
employee who performed mentoring duties was temporarily promoted while 
the other employees who performed the same duties were not. The 
arbitrator found that the agency's failure to temporarily promote the 
other employees who performed mentoring duties violated the parties' 
collective bargaining agreement. The arbitrator concluded that the 
agency's actions constituted an unjustified and unwarranted personnel 
action that directly resulted in a reduction of pay within the meaning 
of the Back Pay Act. The arbitrator sustained the grievance and ordered 
the agency to grant retroactive temporary promotion to the employees 
who were not temporarily promoted and were eligible for a temporary 
promotion under the parties' collective bargaining agreement. The FLRA 
found denying an employee a temporary promotion to which the employee 
is entitled under a collective bargaining agreement constitutes an 
unjustified or unwarranted personnel action, and so, the arbitrator's 
award of backpay in these circumstances was authorized under the Back 
Pay Act.
    On September 10, 2003, the FLRA, in accordance with 5 U.S.C. 
7105(i), requested an advisory opinion from OPM regarding an 
interpretation of 5 CFR part 335 and posed the following question: 
``Where an agency violates a collective bargaining agreement provision 
entitling employees to noncompetitive temporary promotions and an 
arbitrator grants a retroactive temporary promotion of more than 120 
days to remedy that violation with the retroactive promotion what is 
the applicability, if any, of the requirements of 5 CFR 
335.103(c)(1)(i) that `competitive procedures' apply to promotions 
exceeding 120 days. If the requirements apply, what effect do they have 
on the arbitral remedy of a retroactive temporary promotion exceeding 
120 days?'' On February 27, 2004, the OPM General Counsel provided a 
response to the FLRA. OPM noted: ``Upon analysis of this issue, OPM 
concludes that 5 CFR 335.103 applies and that the arbitration award in 
this matter is contrary to the regulatory requirement that executive 
agencies must apply competitive procedures for the purposes of 
implementing temporary promotions in excess of 120 days.''
    The case before the FLRA that prompted the request to OPM for an 
advisory opinion was United States Department of Veterans Affairs Ralph 
H. Johnson Medical Center Charleston, South Carolina, and National 
Association of Government Employees, 60 FLRA 46 (2004) (Johnson Medical 
Center). In this case, an arbitrator granted a retroactive temporary 
promotion greater than 120 days. A GS-7 employee filed a grievance 
alleging she had been performing the duties of a computer specialist, 
GS-9, for approximately 2 years. The grievant alleged the agency failed 
to promote her temporarily to the higher grade in violation of the 
parties' collective bargaining agreement that provided for the 
noncompetitive temporary promotion of employees detailed to a higher-
graded position for more than 30 consecutive days.
    In ordering a remedy of backpay exceeding two years, the arbitrator 
rejected the agency's argument that competitive procedures were 
required for temporary promotions exceeding 120 days. Upon appeal to 
the FLRA, the agency alleged the remedy of a temporary promotion in 
excess of 120 days was contrary to 5 CFR 335.103 because competitive 
promotion procedures were not used to affect that promotion action.
    The FLRA rendered its decision relying upon OPM's February 27, 
2004, advisory opinion about 5 CFR 335.103(c)(1)(i). OPM opined the 
arbitrator's decision was contrary to a government-wide regulation by 
providing the grievant a retroactive temporary promotion exceeding 120 
days because there had been no competitive process. Based on this 
advisory opinion, the FLRA modified the award and ordered the agency to 
grant the grievant a retroactive temporary promotion with backpay for 
the difference between GS-7 and GS-9 wage rate, effective August 1999, 
for a period of 120 days because there was no evidence that competitive 
procedures were applied in the promotion of the grievant. Furthermore, 
the FLRA decided there was no showing that a personnel action resulted 
in the withdrawal or reduction of the grievant's pay and therefore the 
grievant was not entitled to back pay for the

[[Page 89323]]

period exceeding the 120-day limitation.\5\
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    \5\ In a concurrence to the Johnson Medical Center decision, 
Member Carol Waller Pope noted ``I have concerns that OPM's 
interpretation actually encourages agencies to violate, rather than 
comply with, Sec.  335.103(c). Specifically, under OPM's 
interpretation, an agency that ignores competitive procedures cannot 
be required to pay employees for higher-graded duties performed in 
excess of 120 days, while an agency that complies with competitive 
procedures can be required to pay employees for those duties. This 
provides agencies a strong incentive to ignore competitive 
procedures when they want to assign employees higher-graded duties 
for more than 120 days.''
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    Following its decision in 2004, the FLRA has found arbitration 
decisions deficient when the arbitrator ordered a temporary promotion 
with backpay for the pay differential for higher-graded work performed 
by an employee exceeding 120 days despite the lack of competitive 
procedures for the promotion. For example, in United States Department 
of the Treasury Internal Revenue Service and National Treasury 
Employees, 61 FLRA 667 (2006), an arbitrator determined the agency 
violated the collective bargaining agreement by ``failing to detail 
[the grievant] for performing work'' at a higher grade. The arbitrator 
expressly rejected the agency's claim that monetary relief could not 
extend beyond 120 days under 5 CFR 335.103(c). In the arbitrator's 
view, ``[t]o deny a remedy longer tha[n] 120 days not only would be at 
odds with negotiated terms, but, in effect, would reward the agency 
with a monetary windfall for its persistent contractual transgression, 
despite grievances having been lodged, thereby subverting the deterrent 
value of the contract's prohibitory language.'' The agency filed 
exceptions with the FLRA. The FLRA noted that ``a provision in a 
collective bargaining agreement establishing the requisite mandatory 
promotion is enforceable only to the extent consistent with civil 
service regulations pertaining to temporary promotions.'' The FLRA also 
found controlling OPM's advisory opinion in its 2004 Johnson Medical 
Center decision that placed a regulatory cap of 120 days on retroactive 
temporary promotions awarded by arbitrators without competition. As 
such, the FLRA set aside that portion of the award of backpay for a 
period exceeding 120 days.
    More recently, in United States Department of the Navy Commander, 
Navy Region Mid-Atlantic Naval Weapons Station Earle and International 
Association of Firefighters Local F-147, 72 FLRA 533 (2021), an 
arbitrator found that the grievants were temporarily assigned the 
duties of a higher-graded position. The arbitrator also found the 
agency violated the parties' collective bargaining agreement, which 
required that employees temporarily assigned to higher-graded positions 
for two pay periods or more receive the higher rate of pay for the 
position to which they have been assigned. The agency challenged the 
amount of the backpay remedy noting it was contrary to 5 CFR 
335.103(c)(1)(i). The FLRA once again found that ``an award granting a 
temporary promotion is enforceable only to the extent that it is 
consistent with civil service regulations pertaining to such 
promotions.'' Specifically, relying on OPM's 2004 advisory opinion, the 
FLRA concluded ``a retroactive temporary promotion and associated 
backpay of more than 120 days cannot be awarded unless the promotion 
was filled competitively.'' The FLRA determined ``no evidence has 
established that the temporary promotion was competed. Therefore, to 
the extent that the backpay remedy exceeds 120 days, it is contrary to 
law.''

II. Proposed Amendment

    OPM proposes amending 5 CFR part 335, as summarized below, to 
clarify that a bargaining unit employee found, pursuant to a final 
order by an arbitrator, adjudicative body, or court, to have been 
detailed or temporarily promoted to a higher-graded position should be 
paid accordingly (i.e., higher compensation) for the entire time the 
employee performed the duties of the higher-graded position. This is 
limited to situations where an employee meets qualification and time-
in-grade requirements established by OPM regulations, but the agency 
made the assignment without use of competitive procedures. For 
bargaining unit employees, this may include when a collective 
bargaining agreement provided for the temporary promotion of employees 
officially assigned to a higher-graded position or to the duties of a 
higher-graded position when such assignment is made without use of 
competitive procedures and the employee otherwise meets qualification 
and time-in-grade requirements. This amendment only applies when a 
third party has made a finding the employee is entitled to receive a 
retroactive temporary promotion. An adjudicative body could include, 
but not be limited to, a third party such as the U.S. Merit Systems 
Protection Board (MSPB) or the Equal Employment Opportunity Commission 
(EEOC).
    Similarly, the proposed amendment clarifies that, when a non-
bargaining unit employee has been temporarily promoted to a higher-
graded position as found by an adjudicative body or court, that 
employee should be paid accordingly (i.e., higher compensation) for the 
entire time performing these duties of a higher-graded position, 
pursuant to a final order by that adjudicative body or court. Similar 
to what is discussed earlier for bargaining unit employees, this is 
limited to situations where an employee meets qualification and time-
in-grade requirements established by OPM regulations, but the agency 
made the assignment without use of competitive procedures. While the 
background focused on disputes related to collective bargaining 
agreements, OPM recognizes that non-bargaining unit employees may 
pursue grievances or complaints related to temporary promotions in 
forums outside of procedures found in collective bargaining agreements. 
The proposed regulatory change addresses such matters for the sake of 
consistency and fairness regardless of the employee's bargaining unit 
status. This amendment only applies when a third party has made a 
finding the employee is entitled to receive a retroactive temporary 
promotion. An adjudicative body could include, but not be limited to, a 
third party such as the MSPB or the EEOC.
Part 335--Promotion and Internal Placement
Subpart A--General Provisions
Section 335.103--Agency Promotion Program
    In Sec.  335.103, agencies are authorized by OPM to make promotions 
under Sec.  335.102 to positions under the competitive service and to 
insure systematic means of selection for promotion according to merit. 
OPM proposes to amend Sec.  335.103 by adding a new paragraph 
(c)(2)(iii) to read, ``Retroactive temporary promotions to higher-
graded positions pursuant to a final order by an arbitrator, 
adjudicative body or court.'' This added language will require agencies 
to pay an employee who has been found to have been noncompetitively, 
temporarily detailed to a higher-graded position at the higher grade 
even for a period of time that exceeds 120 days, pursuant to a final 
order by an arbitrator, adjudicative body, or court. As previously 
noted, this regulatory change would also apply to any employee, 
including non-bargaining unit employees, pursuant to a final order by 
an adjudicative body or court unrelated to procedures found in a 
collective bargaining agreement. For example, an employee may file a 
complaint with the

[[Page 89324]]

Equal Employment Opportunity Commission alleging discrimination on 
matters related to a temporary promotion exceeding 120 days. Finally, 
as previously discussed, this is limited to situations where an 
employee meets qualification and time-in-grade requirements established 
by OPM regulations, but the agency made the assignment without use of 
competitive procedures.
    OPM's interpretation of 5 CFR 335.103 continues to be that agencies 
covered by this regulation must apply competitive procedures for the 
purpose of implementing temporary promotions in excess of 120 days. 
This is consistent with the wording of regulatory language that has 
existed for decades OPM believes requiring competition for these 
opportunities when they exceed 120 days supports merit system 
principles at 5 U.S.C. 2301 and provides greater job opportunities to 
the workforce.
    The merit system principles (MSPs) \6\ are nine basic standards 
that govern the management of the executive branch workforce and serve 
as the foundation of the Federal civil service. The U.S. Merit Systems 
Protection Board (MSPB) has noted the general themes of the MSPs and 
prohibited personnel practices \7\ are: (1) Fairness--treating 
employees fairly in all aspects of their employment; (2) Protection--
refraining from misuse of authority and protecting employees from harm, 
such as reprisal for the exercise of a legally protected right; and (3) 
Stewardship--management employees in the short-term and long-term 
public interest.\8\ For example, MSP # 1 provides that ``Recruitment 
should be from qualified individuals from appropriate sources in an 
endeavor to achieve a work force from all segments of society, and 
selection and advancement should be determined solely on the basis of 
relative ability, knowledge, and skills, after fair and open 
competition which assures that all receive equal opportunity.'' \9\ The 
MSPB has noted MSP # 1 ``[f]ocuses on attaining a well-qualified and 
representative workforce through open recruitment and fair, job-related 
assessment of applicants.'' Therefore, OPM believes 5 CFR 335.103 
strikes the right balance between when competitive procedures are 
necessary and when they are not necessary, depending on the duration of 
the time-limited promotion. For situations where agencies have more 
immediate, short-term needs of 120 days or less, it is appropriate for 
agencies to non-competitively assign higher-graded duties to qualified 
employees to meet these needs. For situations where agencies have 
longer-term needs exceeding 120 days, use of competitive procedures is 
consistent with the purpose of MSP # 1. However, OPM also considers it 
unfair for employees to be assigned these higher-graded duties and not 
be compensated accordingly for the higher-graded duties when employee 
has effectively been detailed to a higher-graded position for more than 
120 days.
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    \6\ 5 U.S.C. 2301: Merit system principles.
    \7\ 5 U.S.C. 2302: Prohibited personnel practices.
    \8\ The Merit System Principles: Keys to Managing the Federal 
Workforce (mspb.gov), October 2020, available at https://www.mspb.gov/studies/studies/The_Merit_System_Principles_Keys_to_Managing_the_Federal_Workforce_1371890.pdf.
    \9\ See 5 U.S.C. 2301(b)(1).
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    OPM reminds agencies that they should not assign employees to 
perform higher-graded duties for periods exceeding 120 days such that 
the employee has been effectively detailed to a higher-grade position 
without following applicable competitive procedures. Under this 
proposed regulation, agencies are reminded that they may be required to 
provide higher compensation as a result of arbitrator, adjudicative or 
court decisions. OPM also reminds agencies, subject to the requirements 
of 5 CFR part 335, that competitive procedures should always be 
followed if the agency anticipates the assignment of higher-graded 
duties may exceed 120 days. If the agency incorrectly anticipates the 
assignment of higher graded duties will last 120 days or less but later 
determines the need exceeds 120 days, the agency must follow 
competitive procedures for assignment of such duties beyond 120 days 
for any particular employee or assign the higher-graded work to another 
qualified employee, up to, but not exceeding 120 days. Finally, OPM 
reminds agencies to consider this when negotiating new collective 
bargaining agreement provisions regarding temporary promotions. 
Collective bargaining agreements must be consistent with requirements 
in government-wide regulations on this matter. In fact, newly 
negotiated collective bargaining agreements that allow non-competitive 
temporary promotion exceeding 120 days must be disapproved in agency 
head review for not complying with government-wide regulations.\10\ 
However, some agreements are silent on the length of the time-limited 
promotion and may not be in conflict with government-wide regulations 
as written.
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    \10\ 5 U.S.C. 7114(c) provides that ``(1) An agreement between 
any agency and an exclusive representative shall be subject to 
approval by the head of the agency.'' and ``(2) The head of the 
agency shall approve the agreement within 30 days from the date the 
agreement is executed if the agreement is in accordance with the 
provisions of this chapter and any other applicable law, rule, or 
regulation (unless the agency has granted an exception to the 
provision.''
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    It should be noted 5 CFR part 335 does not apply to positions in 
the Excepted Service. Therefore, the 2004 OPM advisory opinion and the 
various FLRA decisions on this matter are not applicable to the issue 
of when competitive procedures must be followed for time-limited 
promotions in the Excepted Service. However, agencies with employees in 
the Excepted Service are subject to Merit System Principles and should 
be mindful of these principles when assigning Excepted Service 
employees the duties of a higher-graded position.

III. Regulatory Analysis

A. Statement of Need

    This rulemaking has two purposes. First, OPM intends to remind 
agencies that competitive procedures must be followed when assigning 
duties of a higher-graded position to employees for a period of time 
exceeding 120 days. Second, in recognition that there continue to be 
situations where competitive procedures are not followed by agencies 
subject to 5 CFR part 335, this rulemaking provides the possibility of 
remedial relief to employees covered by collective bargaining 
agreements requiring temporary promotions to non-bargaining unit 
employees when an arbitrator, adjudicative body or court finds the 
employee has been detailed or temporarily promoted to a higher-graded 
position.
    On August 5, 2022, OPM received a petition from the National 
Treasury Employees Union (NTEU), which represents Federal workers in 34 
agencies and departments,\11\ to amend OPM regulations at 5 CFR 335.103 
``to remove the existing 120-day cap on back pay for employees who 
perform higher graded work during noncompetitive temporary promotions 
and details.'' NTEU noted that OPM's existing regulation, as 
interpreted in a 2004 OPM advisory opinion, has led to ``significant 
unfairness.'' NTEU stated that prior to that advisory opinion, 
arbitrators had awarded back pay to employees who performed higher-
graded duties. ``Arbitrators made employees whole for the time they 
spent performing such work, without any 120-day limitation.'' NTEU 
noted that the 2004 decision of the FLRA abandoned years of precedent 
by limiting the back pay remedy for employees performing higher-graded 
duties to 120 days each year. NTEU

[[Page 89325]]

correctly noted that FLRA's decision ``was based entirely on [OPM's] 
advisory opinion.''
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    \11\ See NTEU, ``Our Agencies,'' https://www.nteu.org/who-we-are/our-agencies.
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    NTEU notes that ``although OPM's 2004 interpretation of the 
regulation was in error, NTEU is not [asking OPM] to revisit its 
analysis.'' NTEU stated it is proposing ``instead that the regulation 
itself be changed to more clearly establish that employees detailed or 
temporarily promoted to a higher grade, or who perform higher-graded 
duties, should be paid accordingly, even if the detail, temporary 
promotion or performance of such duties exceeds 120 days.''
    On November 3, 2022, the National Federation of Federal Employees 
(NFFE), which represents approximately 110,000 government workers 
across the United States,\12\ provided suggestions to OPM on revisions 
to existing OPM regulations, including 5 CFR 335.103(c)(1)(i). 
Specifically, NFFE requested revisions to ``eliminate limit on back pay 
for temporary promotions to 120 days.''
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    \12\ See NFFE, About Us, https://nffe.org/about/.
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    OPM's interpretation that competitive procedures must be followed 
for temporary promotions exceeding 120 days has not changed. 
Notwithstanding OPM's current interpretation of the requirements of 5 
CFR 335.103, however, OPM agrees that employees should be compensated 
accordingly when an agency has been found to be out of compliance with 
requirements of a collective bargaining agreement and understands that 
the current text of the regulations could provide greater clarity. 
Furthermore, OPM's 2004 advisory opinion should not be cited as a basis 
for agencies to disregard, whether intentionally or unintentionally, 
government-wide regulations on use of competitive procedures and 
collective bargaining agreement requirements regarding temporary 
promotions for performing duties of a higher-graded position. 
Therefore, OPM is proposing to modify 5 CFR 335.103 to address these 
scenarios.
    This proposed modification reinforces the President's recognition 
that Federal civil servants' rights deserve to be protected. President 
Biden has stated that ``[c]areer civil servants are the backbone of the 
Federal workforce, providing the expertise and experience necessary for 
the critical functioning of the Federal Government. It is the policy of 
the United States to protect, empower, and rebuild the Federal 
workforce.'' \13\ NTEU notes that it supports merit-based competition 
for long-term promotions or details to positions that are properly 
classified at a higher grade to ensure that the merit system principles 
of fair and open competition are met.
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    \13\ See Executive Order 14003, Protecting the Federal Workforce 
(January 22, 2021).
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    NTEU notes that ``[i]n practice, many of these cases arise where 
higher-graded duties are assigned to employees on a different, lower-
graded position description, due to staffing shortages, budget 
constraints, retirements, etc. Agency managers, who are often tasked 
with delivering the agency's mission without the resources to do so, 
simply assign the higher graded work to whomever is available and 
convenient.'' NTEU notes that ``these employees are precluded from any 
remedial relief beyond 120 days--not because the inequity has ceased to 
exist, but because the relevant regulation has been reinterpreted since 
2004 to undermine, rather than strengthen, merit system principles.'' 
OPM believes the proposed modification is a reasonable solution to 
address those situations where an agency may assign higher-graded 
duties to an employee without using competitive procedures and where a 
collective bargaining agreement requires a temporary promotion.

B. Regulatory Alternatives

    An alternative to this rulemaking is to not issue a regulation and 
to continue the possibility of agencies not using competitive 
procedures when assigning an employee the duties of a higher-graded 
position over 120 days because of an absence of clarification. As a 
result, employees may not have an opportunity to be made whole for time 
performing higher-graded duties in excess of 120 days even if the 
employee challenges the agency action in a grievance or complaint 
process. OPM has determined this is not a viable option. As NTEU noted, 
an inequity exists and employees are precluded from any remedial relief 
beyond 120 days because the relevant regulation has been reinterpreted 
since 2004 to undermine, rather than strengthen, merit system 
principles.
    Another regulatory alternative is to address this issue through 
OPM's oversight function. OPM's statutory responsibility to oversee the 
Federal personnel system encompasses assessment of compliance with 
merit system principles, and supporting laws, rules, regulations, 
Executive orders, and OPM standards, as well as the effectiveness of 
personnel policies, programs, and operations.\14\ The legal authority 
for OPM oversight is 5 U.S.C. 1104(b)(2) and 5 CFR parts 5 and 10. 
Under this authority, OPM can evaluate the effectiveness of agency 
personnel policies, programs and operations and agency compliance with 
and enforcement of applicable laws, rules, regulations, and OPM 
directives. OPM can also direct corrective action where appropriate.
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    \14\ OPM website, Compliance, What is our oversight 
responsibility?, available at https://www.opm.gov/policy-data-oversight/oversight-activities/compliance/.
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    While OPM can, through its oversight process, identify situations 
where an agency is not complying with the requirement to use 
competitive procedures for time-limited promotions that exceed 120 
days, OPM's enforcement process may not provide timely relief to 
employees who are impacted by an agency's failure to follow OPM 
procedures on time-limited promotions. Furthermore, based on OPM's 2004 
advisory opinion, although OPM may direct, as part of its oversight 
process, an agency to follow competitive procedures for time-limited 
promotions exceeding 120 days, this would not provide any monetary 
relief for employees covered by collective bargaining agreements that 
require time-limited promotions and are identified by OPM as situations 
where OPM's regulations were not properly followed.

C. Impact

    OPM is issuing this proposed regulation to authorize a retroactive 
temporary promotion when a competitive service employee, effectively, 
has been detailed or temporarily promoted to higher grade duties of a 
higher-graded position if a collective bargaining agreement requires it 
and the employee has been assigned these duties outside of competitive 
hiring procedures, as found pursuant to a final order by an arbitrator, 
adjudicative body, or court. By authorizing a retroactive promotion in 
these situations, OPM affirms that an employee should be paid 
accordingly for the entire time performing these duties of a higher-
graded position. In addition, a non-bargaining unit competitive service 
employee who is temporarily promoted to higher grade duties of a 
higher-graded position should be paid accordingly for the entire time 
performing these duties of a higher-graded position, as found pursuant 
to a final order by an adjudicative body or court.
    As discussed earlier, OPM reminds agencies to use competitive 
procedures when assigning an employee the duties of a higher-graded 
position when the assignment exceeds 120 days. This is

[[Page 89326]]

not a new requirement and simply reinforces what agencies, subject to 5 
CFR part 335, should already be doing and should have no impact. 
However, in those situations where an agency does not meet this 
regulatory requirement, it reinforces the commitment an agency has 
already made as part of the collective bargaining process under 5 
U.S.C. chapter 71. It also provides all employees, whether bargaining 
unit or non-bargaining unit, an opportunity to be made whole if an 
agency does not properly follow policies related to temporary 
promotions and pursues a grievance or complaint in applicable grievance 
and complaint processes which may be available to employees.

D. Costs

    This proposed rule will affect the operations of over 80 non-postal 
Federal agencies in the Executive Branch--ranging from cabinet-level 
departments to small independent agencies--with one or more labor 
organizations certified by the FLRA as the exclusive representative of 
employees in an appropriate unit pursuant to 5 U.S.C. 7112. We do not 
believe this proposed rule should substantially increase the ongoing 
administrative costs to agencies (including the administrative costs of 
administering the program) as this rulemaking leverages existing 
procedures and requires agencies to comply with collective bargaining 
agreements that they have made with unions. Furthermore, OPM believes 
costs should be negligible as we anticipate agencies will leverage 
existing resources to implement the reminders in this rulemaking and 
the regulatory requirements. Ultimately, costs are likely to vary from 
agency to agency since some agencies have collective bargaining unit 
agreements with language regarding the process for detailing bargaining 
unit employees to a higher graded position for more than 120 days. 
Furthermore, some agencies are currently already closely adhering to 
OPM regulations in Sec.  335.103.
    With the above in mind, we estimate this rulemaking will require 
agencies to review policies on time-limited promotions subject to 5 CFR 
part 335; update these policies if needed; and provide reminders and, 
if necessary, training to implement this proposed rule and reinforce 
existing requirements in 5 CFR part 335. For the purpose of this cost 
analysis, the assumed staffing for Federal employees performing the 
work required by the regulations in part 335 is one executive; one GS-
15, step 5; a GS-14, step 5; and one GS-13, step 5 in the Washington, 
DC, locality area. The 2023 basic rate of pay for an executive at an 
agency with a certified SES performance appraisal system is $235,600 
annually, or $113.27 per hour. For General Schedule employees in the 
Washington, DC, locality area, the 2023 pay table rates are $176,458 
annually and $84.55 hourly for GS-15, step 5; $150,016 annually and 
$71.88 for GS-14; and $126,949 annually and $60.83 hourly for GS-13, 
step 5. We assume that the total dollar value of labor, which includes 
wages, benefits, and overhead, is equal to 200 percent of the wage 
rate, resulting in assumed hourly labor costs of $226.54 for an 
executive; $169.10 for a GS-15, step 5; $143.76 for a GS-14, step 5; 
and $121.66 for a GS-13, step 5. In order to comply with the regulatory 
changes in this proposed rule and the reminder in this preamble to 
follow competitive procedures for time-limited promotions exceeding 120 
days, affected agencies will need to review and update (if applicable) 
their policies, procedures and develop appropriate training or 
communications to appropriate personnel. Agencies are reminded to 
review 5 CFR part 335, agency merit promotion plans, and related 
guidance to ensure compliance. Agencies are also encouraged to 
communicate with managers, supervisors, and agency staff who are 
responsible for completing actions related to part 335. We estimate 
that this will require an average of 10 hours of work by employees with 
an average hourly cost of $165.26. This would result in estimated costs 
of about $1,653 per agency, and about $132,212 in total government-
wide. If an agency follows existing requirements to use competitive 
procedures for time-limited promotions exceeding 120 days, there should 
be no need for employees to file grievances ending in binding 
arbitration that could order backpay with interest. To the extent that 
grievances are filed and arbitration decisions order backpay, the costs 
will vary by agency depending on the number of employees impacted, the 
salaries of these employees, and the amount of time performing the 
higher-graded duties beyond 120 days. OPM does not have data to make a 
determination on potential costs related to arbitration decisions 
implementing the proposed regulatory language. OPM requests comments on 
the implementation and impacts of this proposed rule.

E. Benefits

    This proposed rule has several important benefits. First, it 
supports merit system principles by reminding agencies to use 
competitive procedures for time-limited promotions exceeding 120 days. 
As discussed earlier, OPM believes 5 CFR 335.103 strikes the right 
balance between when competitive procedures are necessary and when they 
are not necessary, depending on the duration of the time-limited 
promotion. OPM believes that fair and open competition is appropriate 
for performing duties for a period of time exceeding 120 days.
    OPM also agrees that it is unfair for employees to be assigned 
these higher-graded duties and not be compensated accordingly when 
assignment of these duties exceeds 120 days and a third party orders 
the agency to compensate the employee accordingly. Therefore, the 
second benefit of this rulemaking is that it facilitates agencies' 
provision of monetary relief to employees who perform duties of a 
higher-graded position for more than 120 days where the agency has 
failed to follow the requirements of 5 CFR part 335. OPM expects this 
proposed rule to further incentivize agencies to follow proper 
procedures when assigning higher-graded duties and to honor the 
commitment agencies made in their collective bargaining agreement when 
they agreed to temporarily promote employees. This proposed rule not 
only reinforces merit system principles but reinforces the agency's 
obligations under the Federal Service Labor-Management Relations 
Statute.

IV. Request for Comments

    OPM requests comments on the implementation and impacts of this 
proposed rule in general. Such information will be useful for better 
understanding the effect of these proposed revisions on time-limited 
promotions impacted by collective bargaining agreements. The type of 
information in which OPM is interested includes, but is not limited to, 
the following:
     Each year, out of the total number of grievances or 
administrative complaints filed by bargaining unit employees, what 
percentage of those grievances or other types of complaints claim 
appropriate compensation was denied after being non-competitively 
placed on time-limited promotions exceeding 120 days and despite 
collective bargaining agreement requirements?
     Each year, out of the total number of administrative 
grievances or complaints filed by non-bargaining unit employees, what 
percentage of those administrative grievances or other types of 
complaints claim commensurate compensation was denied after being non-
competitively placed on time-limited promotions exceeding 120 days?

[[Page 89327]]

     OPM also requests comment on the options available to non-
bargaining unit employees to seek redress after being non-competitively 
placed on a time-limited promotion exceeding 120 days without 
commensurate pay. Based on comments received, OPM could consider 
exercising its authority to confer jurisdiction on an adjudicative body 
to evaluate complaints filed by non-bargaining unit employees to the 
extent OPM can confer such jurisdiction.
Regulatory Review
    Executive Orders 13563, 12866, and 14094 direct agencies to assess 
all costs and benefits of available regulatory alternatives and, if 
regulation is necessary, to select regulatory approaches that maximize 
net benefits (including potential economic, environmental, public 
health and safety effects, distributive impacts, and equity). A 
regulatory impact analysis must be prepared for major rules with 
effects of $200 million or more in any one year. This rulemaking does 
not reach that threshold; however, OMB has designated the rule as a 
``significant regulatory action'' under Executive Order 14094.
Regulatory Flexibility Act
    The Director of OPM certifies that this proposed rule will not have 
a significant economic impact on a substantial number of small 
entities.
Federalism
    This proposed rule will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this proposed rule does not have 
sufficient federalism implications to warrant preparation of a 
Federalism Assessment.
Civil Justice Reform
    This proposed rule meets the applicable standard set forth in 
Executive Order 12988.
Unfunded Mandates Reform Act of 1995
    This proposed rule will not result in the expenditure by state, 
local, and tribal governments, in the aggregate, or by the private 
sector, of $100 million or more in any year and it will not 
significantly or uniquely affect small governments. Therefore, no 
actions were deemed necessary under the provisions of the Unfunded 
Mandates Reform Act of 1995.
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521)
    This regulatory action is not expected to impose any reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

List of Subjects in 5 CFR Part 335

    Government employees.

    Office of Personnel Management.
Kayyonne Marston,
Federal Register Liaison.

    Accordingly, for the reasons stated in the preamble, OPM proposes 
to amend 5 CFR part 335 as follows:

PART 335--Promotion and Internal Placement

0
1. The authority citation for part 335 continues to read as follows:

    Authority: 5 U.S.C. 2301, 2302, 3301, 3302, 3330; E.O. 10577, 
E.O. 11478, 3 CFR 1966-1970, Comp., page 803, unless otherwise 
noted, E.O. 13087; and E.O. 13152, 3 CFR 19554-58 Comp., p.218; 5 
U.S.C. 3304(f), and Pub. L. 106-117, and 5 CFR 2.2 and 7.1.

Subpart A--General Provisions

0
2. Amend Sec.  335.103 by adding new paragraph (c)(2)(iii) to read as 
follows:


Sec.  335.103  Agency promotion programs.

* * * * *
    (c) * * *
    (2) * * *
    (iii) A retroactive temporary promotion to a higher-graded position 
pursuant to a final order by an arbitrator, adjudicative body, or 
court.
* * * * *
[FR Doc. 2023-28458 Filed 12-26-23; 8:45 am]
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