Time-Limited Promotions, 60289-60298 [2024-16030]

Agencies

• Office of Personnel Management

[Federal Register Volume 89, Number 143 (Thursday, July 25, 2024)]
[Rules and Regulations]
[Pages 60289-60298]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16030]



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Rules and Regulations
                                                Federal Register
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This section of the FEDERAL REGISTER contains regulatory documents 
having general applicability and legal effect, most of which are keyed 
to and codified in the Code of Federal Regulations, which is published 
under 50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by the Superintendent of Documents. 

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Federal Register / Vol. 89, No. 143 / Thursday, July 25, 2024 / Rules 
and Regulations

[[Page 60289]]



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: Final rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a final 
rule to specify that employees who are detailed or temporarily promoted 
to higher-grade duties of a higher-graded position should be paid 
accordingly for the entire time spent performing the duties of the 
higher-graded position, as found pursuant to a final order by an 
appropriate authority.

DATES: Effective August 26, 2024.

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

SUPPLEMENTARY INFORMATION:

I. Background

    Agencies must follow competitive procedures for time-limited 
promotions of more than 120 days to higher-graded positions in the 
competitive service. 5 CFR 335.103. 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.\1\ 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-graded position for an extended period of time. 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.'' 
\2\ 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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    \1\ See National Federation of Federal Employees v. Department 
of the Interior Bureau of Land Management, 29 FLRA 1491 (1987).
    \2\ 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.\3\ However, 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 part 335 Sec.  
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?'' \4\ On February 27, 2004, the OPM General Counsel provided 
a letter response to the FLRA. In its letter, 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.''
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    \3\ See Oklahoma City Air Logistics Center, Tinker AFB, OK and 
AFGE Local 9116, 42 FLRA 62 (October 1991); U.S. Department of the 
Army, Fort Polk, LA, and the National Association of Government 
Employees, Local R5-168, 44 FLRA 121 (1992); and Social Security 
Administration and the American Federation of Government Employees, 
Local 220, 57 FLRA 115 (2001).
    \4\ 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).
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    Relying upon OPM's February 27, 2004, advisory opinion about 5 CFR 
335.103(c)(1)(i), the FLRA rendered a decision finding that an 
arbitrator's decision involving an employee of the Department of 
Veterans Affairs (DVA), to the extent that it directs a retroactive 
temporary promotion of more than 120 days, is contrary to 5 CFR 
335.103(c) and a DVA regulation. The FLRA noted that OPM advised the 
arbitrator's decision was contrary to a government-wide regulation, 5 
CFR 335.103(c), by providing the grievant a retroactive temporary 
promotion exceeding 120 days with no competitive process. Based on this 
advisory opinion from OPM, the FLRA modified the arbitrator's 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.\5\ 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 period exceeding the 120-day limitation.'' \6\ 
Following its decision in 2004, the FLRA has issued various decisions 
which set aside portions of

[[Page 60290]]

arbitration awards ordering backpay on temporary promotions for the 
time period exceeding 120 days when the temporary promotion occurred 
without use of competitive procedures.\7\ These subsequent decisions by 
the FLRA eventually resulted in a request to OPM by the National 
Treasury Employees Union (NTEU).
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    \5\ Id.
    \6\ 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.''
    \7\ See United States Department of the Treasury Internal 
Revenue Service and National Treasury Employees, 61 FLRA 667 (2006) 
and 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).
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    On August 5, 2022, OPM received a petition from NTEU, which 
represents Federal workers in 34 agencies and departments,\8\ 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 the 2004 OPM advisory 
opinion, has led to ``significant unfairness.'' \9\ 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 expressed the view that the FLRA's 2004 
decision abandoned years of former precedent by limiting the back pay 
remedy for employees performing higher-graded duties to 120 days each 
year. NTEU correctly noted that the FLRA's decision ``was based 
entirely on [OPM's] advisory opinion.''
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    \8\ See NTEU, ``Our Agencies,'' available at https://www.nteu.org/who-we-are/our-agencies.
    \9\ See NTEU petition posted here: www.nteu.org/~/media/Files/
nteu/docs/public/judicial-notice/opm-petition-re-120-day-rule.
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    In response to NTEU's petition, OPM published a proposed rule in 
the Federal Register at 88 FR 89321 on December 27, 2023. Specifically, 
OPM proposed to amend 5 CFR part 335 to specify 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 (that 
is, higher compensation) for the entire time the employee performed the 
duties of the higher-graded position. This proposal was limited to 
situations where an employee meets qualification and time-in-grade 
requirements established by OPM regulations and 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. As proposed, this provision would apply only when a 
third party has found the employee is entitled to receive a retroactive 
temporary promotion. The proposed amendment noted that 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). The proposed modification to 5 CFR 
335.103(c)(2) would mean that competitive procedures do not apply to 
situations where a third party has found the bargaining unit employee 
is entitled to receive a retroactive temporary promotion.
    Similarly, the proposed amendment provided 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 (that is, 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. It was 
also limited to situations where an employee meets qualification and 
time-in-grade requirements established by OPM regulations and the 
agency made the assignment without use of competitive procedures. While 
the issue originally arose based on disputes related to collective 
bargaining agreements, OPM recognized 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 rule addressed such matters for the 
sake of consistency and fairness regardless of the employee's 
bargaining unit status. As proposed, the provisions for non-bargaining 
unit employees would only apply when a third party has found the 
employee is entitled to receive a retroactive temporary promotion. The 
proposed rule noted that an adjudicative body could include, but not be 
limited to, a third party such as the MSPB or the EEOC. As with 
bargaining unit employees, the proposed changes to 5 CFR 335.103(c)(2) 
would mean that competitive procedures do not apply to situations where 
a third party has found the non-bargaining unit employee is entitled to 
receive a retroactive temporary promotion.
    After considering the comments received, OPM is finalizing the 
proposed amendments with modifications as discussed in the next 
section.

Public Comments

    In response to the proposed rule, OPM received 21 comments during 
the 60-day public comment period from multiple individuals (primarily 
Federal employees), multiple labor organizations, a professional 
organization representing employment law lawyers, and one Federal 
agency. At the conclusion of the public comment period, OPM reviewed 
and analyzed the comments. In general, the comments largely supported 
the rule change. The comments are summarized below, along with the 
suggestions for revisions that were considered and either adopted, 
adopted in part, or declined, and the rationale therefor.
    In the first section below, we address general or overarching 
comments. In the section that follows, we address comments related to 
the specific portion of the regulation that OPM proposed to revise.

General Comments

    A national labor organization expressed support for the rule and 
stated the regulatory changes are necessary to ensure compliance with 
merit system principles requiring fair and equitable treatment and 
equal pay for work of equal value. Comment 0021.\10\ This labor 
organization further noted the changes are necessary to ensure that 
Federal agencies are properly incentivized to comply with Federal 
regulations concerning the non-competitive placement of employees in 
temporary promotions. The labor organization noted that employees, with 
limited exceptions not applicable here, are obligated to follow the 
instructions and orders of their supervisors and managers. Accordingly, 
the primary remedy available to employees assigned to perform higher-
graded duties without a concurrent temporary promotion is to seek 
third-party review of the agency's actions. The labor organization 
noted that the changes ``will eliminate the arbitrary 120-day limit on 
backpay recovery and are necessary to ensure that employees are fully 
and fairly

[[Page 60291]]

compensated for the assigned work they perform.'' The labor 
organization further stated, ``the elimination of the 120-day limit 
will, moreover, lead to more effective and efficient administration of 
the Federal government because it will remove the financial benefit 
agencies accrued by failing to comply with OPM regulations.'' This 
labor organization stated that OPM's proposed regulatory changes are 
consistent with the statutory authority delegated to OPM to regulate 
the civil service and laws governing the competitive service. Finally, 
this labor organization stated that the FLRA decision and OPM's 2004 
advisory opinion to the FLRA were ``based solely and myopically on the 
existing OPM regulation,'' but OPM's ``proposed changes, on the other 
hand, heed Congress' instruction that `[f]ederal personnel management 
should be implemented consistent with the . . . merit system 
principles,' 5 U.S.C. 2301, and ensure that appropriate deference is 
given to the whole of Title 5.''
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    \10\ References to comments provide the location of the item in 
the public record (that is, the two-digit number associated with the 
location in the docket). Comments filed in response to the proposed 
rule are available at https://www.regulations.gov/comment/OPM-2023-0041-00nn, where 00nn is the comment number.
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    OPM thanks the labor organization for the support of the proposed 
rule and is not making any changes based on these comments. However, 
OPM wishes to respond to the labor organization's statement that ``the 
elimination of the 120-day limit will, moreover, lead to more effective 
and efficient administration of the Federal government because it will 
remove the financial benefit agencies accrued by failing to comply with 
OPM regulations.'' OPM notes that neither the proposed rule nor this 
final rule is eliminating the requirement for agencies to use 
competitive procedures when temporarily promoting employees for periods 
exceeding 120 days. The requirements for competitive procedures have 
not changed, but this final rule will require agencies to provide a 
time-limited promotion as a result of a determination by an appropriate 
authority as defined in 5 CFR 550.803.
    Comment 0016, submitted by a professional organization representing 
employment lawyers, supports the proposed rule, stating that it 
clarifies that an employee working in a higher-graded position should 
be compensated for the entire time they performed the duties. They 
further note that the post-2004 FLRA cases that limited back pay to the 
period of temporary promotion did not fit the reality of the actual 
work performed at the higher grade. OPM thanks the commenter for their 
support of the proposed rule. OPM will not be making any changes to the 
proposed rule based on this comment as no recommendations for changes 
were offered. Nevertheless, OPM believes it is important to remind the 
commenter that the rule concerns situations where time-limited 
promotions exceeding 120 days occurred and there was an order by a 
third-party to provide the higher pay after a grievance or complaint 
was filed by the employee. Furthermore, as discussed in the proposed 
rule, the employee still needs to meet qualification and time-in-grade 
requirements to receive the time-limited promotion. Finally, agencies 
are not prohibited from detailing employees to higher-graded positions 
or duties without commensurate pay. In accordance with 5 U.S.C. 3341, 
an agency may detail an employee in the competitive service to a 
position in either the competitive or excepted service. In other words, 
time-limited promotions are not always required for details to higher-
graded duties. There may be exceptions, such as collective bargaining 
agreement requirements, which require the employee to be temporarily 
promoted.
    Comment 0019, submitted by a coalition of 14 labor organizations, 
noted that OPM's proposed changes will ``clarify that a bargaining unit 
employee found by an adjudicator 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.'' These labor organizations 
further state ``OPM correctly explains the cost of this change will be 
negligible. And the compensating benefits are that the new rule will 
reinforce merit system principles and rectify an inequitable state of 
affairs for employees doing higher-graded work.''
    These labor organizations also note the FLRA erroneously held in 
2018 that a grievance on behalf of an employee who had not received 
appropriate compensation for higher-graded work involved a 
nongrievable, classification matter. They further note that the FLRA 
corrected course a few years later explaining that a grievance concerns 
a classification of a position under 5 U.S.C. 7121(c)(5) when ``the 
substance of the grievance concerns the grade level of the duties 
permanently assigned to and performed by an employee.'' They state that 
``by contrast, a grievance does not involve classification within the 
meaning of section 7121(c)(5) when its substance concerns whether the 
employee is entitled to a temporary promotion . . . because the 
employee has performed the established duties of a higher-graded 
position.'' Therefore, they state that, to ensure the objective of the 
proposed rule is met, they recommend that OPM should further clarify 
that grievances seeking back pay owed for temporary promotions do not 
involve classification matters within the meaning of 5 U.S.C. 
7121(c)(5).
    OPM thanks the labor organizations for their support of the 
proposed rule. While OPM understands and appreciates the concerns 
raised by the labor organizations regarding the impact of FLRA 
decisions interpreting whether temporary promotions concern 
classification matters within the meaning of 5 U.S.C. 7121(c)(5), the 
issue raised is beyond the scope of this rulemaking, which addresses 
the narrow issue of whether an individual may receive backpay for more 
than 120 days in specified circumstances. Accordingly, OPM is not 
making any changes based on this recommendation.
    Two individual commenters recommended OPM modify the regulations to 
allow agencies to continue temporary promotion rotations until the next 
individual is in the position. Comment 0002 and 0003. One of these 
commenters stated that administrative actions are held up by 
administrative and leadership decisions while the other commenter 
stated that it takes up to 8 months to fill the positions. The first 
commenter noted it would be beneficial to end the temporary promotion 
in conjunction with a set hiring date, instead of arbitrarily ending. 
Likewise, the other commenter stated it would save time for human 
resources personnel and allow for filling of critical positions. OPM 
thanks the commenters for their suggestions but is not making any 
changes based on these comments. OPM's interpretation of 5 CFR 335.103 
continues to be that those agencies covered by this regulation must 
apply competitive procedures for the purpose of implementing time-
limited 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 the merit system principles outlined in 5 U.S.C. 2301 
and provides greater opportunities for the workforce. While OPM 
understands that competitive actions do not always occur on the 
schedule desired by management, following these procedures does not 
prevent agencies from adjusting and improving their internal hiring 
processes and projecting when a time-limited promotion is scheduled to 
end and preparing to select another candidate for the position.
    Another individual commenter expressed support for the rule change

[[Page 60292]]

but noted they support paying employees in time-limited promotions for 
the full time the employee is performing higher-graded duties, not just 
the first 120 days. Comment 0005. OPM thanks the commenter for their 
comments but is not making any changes to the rule based on this 
comment. OPM's interpretation of 5 CFR 335.103 continues to be that 
those agencies covered by this regulation must apply competitive 
procedures for the purpose of implementing time-limited promotions in 
excess of 120 days. OPM believes requiring competition for these 
opportunities when they exceed 120 days supports merit system 
principles and provides greater opportunities to the workforce. 
Finally, the proposed rule allowed retroactive temporary promotions 
only when there is a third-party decision ordering the retroactive 
time-limited promotion. The final rule generally adopts this proposed 
approach with minor revisions.
    Several individual commenters expressed support for this rule and 
noted that employees detailed to higher-graded duties should always be 
compensated for higher pay. Comments 0007, 0008, and 0011. For example, 
one commenter expressed support for this rule noting they are on detail 
as an acting supervisor but without any higher pay. They noted that, 
while they are learning, they believe they should be provided pay for 
the detail or temporarily promoted for at least 120 days. Another 
commenter stated they were assigned to a higher-graded position for a 
year and a half but were not compensated and seek OPM's assistance. 
Another commenter stated that there are employees detailed to higher-
graded or higher-level positions without formal paperwork and, when 
paperwork is completed, the 120-day limit is rarely observed with 
critical positions being vacant longer than 120 days. OPM thanks the 
commenters but is not making any changes to the rule based on these 
comments. As discussed in greater detail earlier in this preamble, 
agencies are not precluded from detailing employees to higher-graded 
positions without higher pay. In accordance with 5 U.S.C. 3341, an 
agency may detail an employee in the competitive service to a position 
in either the competitive or excepted service.
    Comment 0020, submitted by an individual, suggested, if this rule 
is adopted, there should be a tracking mechanism that would enable all 
parties involved to see if they are in compliance. The commenter 
described a personal situation where they were detailed to a higher-
graded position for more than 120 days but needed to file an EEOC 
complaint to compel the agency to comply with a collective bargaining 
agreement requirement regarding such matters. The commenter noted a 
court ruled they were not entitled to any back pay despite producing 
evidence they were doing the higher-graded work over the six-year 
period in question. OPM thanks the commenter for their response but is 
not making any changes to the rule based on this comment. Both the 
proposed rule and final rule note there must be a third-party decision 
ordering the retroactive time-limited promotion. The appropriate 
mechanism for parties to address any compliance issues is with the 
party ordering the retroactive time-limited promotion. It should be 
noted that, in the case of the commenter, they state the court ruled 
they were not entitled to any back pay. The commenter does not explain 
the rationale the court used in making this determination. In any case, 
this example highlights that not all third parties will necessarily 
rule in favor of the employee, and this rule may not have changed the 
outcome in the commenter's case. OPM also notes that this final rule is 
prospective in nature and does not apply to any determinations made 
prior to the effective date of the rule.
    Comment 0012, submitted by an individual, stated this rule needs to 
be adopted and observed by all agencies, even if there is no collective 
bargaining agreement. The commenter noted that they have seen many 
temporary promotions happening in excess of 120 days where the employee 
has all of the duties and responsibilities of the higher-graded 
position with no benefits of higher pay. Comment 0013, submitted by a 
bargaining unit employee, stated they strongly support the proposed 
rule. They noted that all employees who work higher-graded positions 
should be granted the appropriate pay no matter the length of time they 
are performing the duty. OPM thanks the commenters for supporting the 
proposed rule. OPM is not making any changes based on these comments. 
As discussed in the proposed rule, this is not limited to bargaining 
unit employees covered by a collective bargaining agreement. Still, the 
proposed rule noted there must be a third-party decision ordering the 
retroactive time-limited promotion.
    Comment 0018, submitted by an individual, stated they have been 
acting in a Senior Executive Service (SES) position for 43 weeks 
without higher compensation. The commenter recommended revisions should 
be made to 5 CFR 317.903, which concerns details to SES positions. The 
commenter also suggested the proposed rule should address changes to 5 
CFR part 630 to address accrued annual leave for non-SES employees on 
detail to SES positions. OPM thanks the commenter for these 
suggestions. These comments and recommendations are outside the scope 
of the rulemaking, so there are no changes to the rule based on this 
comment.
    Comment 0010, submitted by an individual, stated that the rule has 
great potential to be implemented in a manner that sidesteps 
competitive procedures. The commenter asserted the rule could, in some 
agencies, prevent an individual from ever being eligible for promotions 
as they may not receive proper time-in-grade credit. Finally, the 
commenter stated there needs to be strict prohibitions in place 
preventing any misuse by agency management, especially when the 
agency's human capital team is lacking in its ability to provide 
skillful oversight. OPM thanks the commenter for their concerns and 
suggestions. OPM will not be making any changes to the proposed rule 
based on this comment. OPM disagrees with the commenter's conclusion 
this rule has great potential to be implemented in a manner that 
sidesteps competitive procedures. As OPM noted in the proposed rule, 
agencies must still use competitive procedures for any time-limited 
promotion that exceeds 120 days. The rule only provides for a 
retroactive time-limited promotion to a higher-graded position pursuant 
to an order by a third-party to provide the higher-pay. Also, as 
discussed earlier in this preamble, agencies have authority to detail 
employees without providing time-limited promotions. OPM also disagrees 
that this rule would prevent an individual from ever being eligible for 
promotion. OPM notes that rules have always required an individual to 
meet both qualification and time in grade requirements in order to 
receive a time-limited promotion. OPM did not propose to change these 
requirements.
    Another individual stated that it is a fairly common occurrence 
that agencies assign higher-graded duties to personnel beyond 120 days 
without following competitive procedures. Comment 0014. They state 
that, more often than not, employees accept the higher-graded duties in 
hopes they will earn a greater chance of being selected for the 
position when the agency finally opens the position for competition. 
The commenter states this (1) reduces motivation for the agencies to 
employ competitive procedures even when a need exists to do so; and (2) 
potentially offers a competitive advantage to

[[Page 60293]]

employees who are willing to accept higher-graded assignments without 
providing opportunities for others to do the same. OPM thanks the 
commenter for their comments but is not making any changes based on 
these comments as the commenter makes no recommendations on the 
proposed rule. As discussed earlier in this preamble, agencies already 
have the authority to detail employees to higher-graded duties without 
receiving the higher pay.
    Comment 0015, submitted by another individual, would like to see 
the proposed rule adopted so that ``abusive practices'' will cease. The 
commenter stated that it is crucial that employees assigned additional 
duties, temporary promotions, or temporary details at higher grades are 
compensated. They further note that failure to establish a policy 
governing the duration of time-limited promotions and corresponding pay 
discourages employees from seeking growth opportunities, prolongs 
periods of vacancies, perpetuates unfair labor practices, and pay 
inequity, and undermines morale and motivation. They stated that OPM 
should regulate these practices to ensure the protection of employees 
and their rights. OPM thanks the commenter for supporting the proposed 
rule. OPM is not making any changes based on this comment as the 
commenter makes no recommendations regarding the proposed rule. It is 
worth noting that agencies are not precluded from detailing employees 
to other positions without higher pay. It should also be noted that the 
proposed rule only provides a retroactive time-limited promotion to a 
higher-graded position pursuant to an order by a third-party to provide 
the higher-pay. In other words, a third-party would need to make a 
finding that a temporary promotion exceeding 120 days is appropriate 
based on the circumstances. For example, an arbitrator could determine 
the agency failed to follow requirements outlined in a collective 
bargaining agreement and order a retroactive time-limited promotion as 
a remedy.
    Comment 0009, submitted by an individual, stated that rules are 
always for the employer's benefit, and we should start working on rules 
for a better working environment. This commenter stated that the time 
spent in a temporary grade and step is not creditable towards the 
completion of a waiting period when the employee is permanently 
promoted. The commenter suggests this restriction on creditable service 
be lifted so it can provide morale and financial benefits to employees 
on time-limited promotions. This commenter also states that their 
organization standardizes position descriptions and recommends they 
instead be based on real responsibility and not standardized. OPM 
thanks the commenter for these suggestions. These comments and 
recommendations are outside the scope of the rulemaking, so OPM is not 
making changes to the rule based on this comment.
    Another individual commenter stated that detailing people into 
higher-graded positions is happening more often and is needed because 
the hiring process is too slow and needs to be fixed. Comment 0006. OPM 
thanks the commenter for their comment but is not making any changes 
based on this comment. This suggestion is beyond the scope of this 
rulemaking as OPM did not propose any changes to the hiring process.
    Finally, an individual commenter noted that the proposed rule only 
permits a non-competitive time-limited promotion if a third party makes 
a decision to do so. Comment 0022. The commenter notes that, for 
bargaining unit employees, this scenario seems more likely if a 
collective bargaining agreement calls for it but notes that collective 
bargaining agreements also should be consistent with government-wide 
regulations. Yet, the commenter observes that government-wide 
regulations require competition for time limited promotions exceeding 
120 days. The commenter asks whether OPM is giving arbitrators a green 
light to ignore a government-wide regulation when making decisions on 
this issue and whether OPM is doing the same for agencies and unions 
when negotiating new collective bargaining agreement. The commenter 
asks about non-bargaining unit employees who are not covered by a 
collective bargaining agreement. The commenter suggests it is not 
likely that a third party would order a temporary promotion exceeding 
120 days for a non-bargaining unit employee not covered by a collective 
bargaining agreement. The commenter expresses skepticism that the MSPB 
would adjudicate matters related to this issue and questions whether 
the EEOC or U.S. Office of Special Counsel would hear such complaints. 
The commenter questions whether employees could file a pay claim with 
OPM or another third party on such matters.
    OPM thanks the commenter for their comments but will not be making 
any changes to the proposed rule based on these comments as the 
commenter does not make any recommendations regarding changes to the 
proposed rule. The proposed rule does not allow arbitrators to ignore 
regulatory requirements. In fact, this final rule changes the 
regulations to allow arbitrators to provide a remedy for employees 
where an agency has not complied with regulatory requirements. 
Similarly, this final rule does not allow agencies or unions to ignore 
regulatory requirements. The background in the proposed rule provided 
extensive detail regarding OPM's expectations that agencies comply with 
the requirements to use competitive procedures for time-limited 
promotions exceeding 120 days. The proposed rule reminded agencies to 
be mindful of government-wide regulations on this matter when 
negotiating new collective bargaining agreements which include any 
procedures regarding time-limited promotions. The proposed rule also 
reminded agencies to be mindful of these regulations when subjecting a 
collective bargaining agreement to agency head review under the Federal 
Service Labor-Management Relations Statute. OPM repeats these reminders 
in this final rule in greater detail in the preamble for ``Section 
335.103--Agency Promotion Program.'' The scope of this rule is limited 
to situations where an employee meets qualification and time-in-grade 
requirements established by OPM regulations; and an appropriate 
authority has made a determination the employee is entitled to a 
retroactive time-limited promotion to resolve a grievance or a 
complaint after the agency has made the assignment without use of 
competitive procedures as required by OPM regulations. 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 time-limited promotions in excess of 120 days, whether the 
employee is a bargaining unit employee or non-bargaining unit 
employees. As discussed in more detail in the preamble for ``Section 
335.103--Agency Promotion Program,'' other third parties may have 
reason to make a determination on such matters.
    In the following sections, we address the public comments related 
to the specific portion of the regulation to which each comment 
applied.

Part 335--Promotion and Internal Placement

    Part 335 addresses promotions and internal placement in the 
competitive service. The authority citation provided in the proposed 
rule did not reflect the addition of ``Public Law 114-47, sec. 2(a) 
(Aug. 7, 2015), as amended by Public Law 114-328, sec. 1135 (Dec. 23, 
2016), codified at 5 U.S.C. 9602,'' which was made by the Appointment 
of Current and Former Land Management

[[Page 60294]]

Employees final rule published on December 6, 2023 (88 FR 84685). OPM 
also notes that several authority citations were inadvertently removed 
in that final rule. The updated authority citation in this final rule 
reinstates the inadvertently deleted authorities, which were provided 
in the proposed rule, and includes the Land Management appointment 
authority.

Subpart A--General Provisions

Section 335.103--Agency Promotion Program
    In this section, OPM proposed 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 proposed language would 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 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 and the agency made the 
assignment without use of competitive procedures.
    A Federal agency commented that it does not challenge OPM's 
proposed change and concurs that, where a collective bargaining 
agreement provides for a retroactive temporary promotion, the 
regulation should not limit the promotion to 120 days. Comment 0017. 
However, the agency expressed significant concerns that the proposed 
language would not allow an agency to settle grievances where an 
employee correctly claims that he or she has been temporarily, 
noncompetitively assigned to a higher-graded position for longer than 
120 days and where the collective bargaining agreement or some other 
document requires the higher compensation. The agency noted that the 
current language prevents an agency and a union from resolving a 
grievance at the lowest possible level and would force the union to 
invoke arbitration resulting in monetary outlays and lost productivity 
by both parties for an issue not in dispute. The agency stated these 
limitations unnecessarily impact the agency's mission and budget as 
well as negatively impact the labor-management environment. The agency 
encouraged OPM to modify the proposed rule to allow for agency 
settlements, with backpay. Specifically, the agency suggested OPM 
include a definition of ``adjudicative body'' to avoid any confusion as 
to who can direct the monetary award.
    OPM notes the proposed rule was never intended to prevent agencies 
from entering into lawful settlement agreements before a grievance or 
complaint, informal or formal, was filed with an outside third party. 
Yet, OPM agrees that the term ``adjudicative body'' may not be clear on 
its face and could cause confusion when parties are applying it. 
Therefore, OPM will revise the language to be consistent with other 
situations where the Back Pay Act, 5 U.S.C. 5596, is applied.
    OPM's Back Pay Act regulations are found in subpart H of 5 CFR part 
550. Specifically, 5 CFR 550.801 notes that the Back Pay Act authorizes 
the payment of back pay, interest, and reasonable attorney fees for the 
purpose of making an employee financially whole (to the extent 
possible) when, on the basis of a timely appeal or an administrative 
determination (including a decision relating to an unfair labor 
practice or grievance), the employee is found by an appropriate 
authority to have been affected by an unjustified or unwarranted 
personnel action that resulted in the withdrawal, reduction, or denial 
of all or part of the pay, allowances, and differentials otherwise due 
to the employee. Furthermore, 5 CFR 550.803 defines ``appropriate 
authority'' as an entity having authority in the case at hand to 
correct or direct the correction of an unjustified or unwarranted 
personnel action, including (1) a court, (2) the Comptroller General of 
the United States, (3) the Office of Personnel Management, (4) the 
Merit Systems Protection Board, (5) the Equal Employment Opportunity 
Commission, (6) the Federal Labor Relations Authority and its General 
Counsel, (7) the Foreign Service Labor Relations Board, (8) the Foreign 
Service Grievance Board, (9) an arbitrator in a binding arbitration 
case, and (10) the head of the employing agency or another official of 
the employing agency to whom such authority is delegated.
    With this in mind, OPM will amend the new paragraph (c)(2)(iii) to 
read as follows: ``A retroactive temporary promotion to a higher-graded 
position pursuant to a determination by an appropriate authority as 
defined in 5 CFR 550.803.'' This revision not only covers the third 
parties specifically identified in the proposed rule but would permit 
agencies to make settlement agreements where appropriate.
    The same Federal agency also recommended the regulatory language be 
revised to elaborate on what a collective bargaining agreement does or 
does not require as relevant to this issue. OPM thanks the commenter 
for the suggestion but is not making any changes based on this 
recommendation. OPM does not believe it is necessary to add regulatory 
language about collective bargaining agreements. Agencies and unions 
already have decades of experience resolving negotiated grievances 
regarding interpretation and application of collective bargaining 
agreements. If an arbitrator determines a collective bargaining 
agreement has been violated regarding a time-limited promotion, the 
arbitrator is essentially determining that an unjustified or 
unwarranted personnel action has occurred. Likewise, an agency official 
with the authority to enter into settlement agreements regarding 
negotiated grievances can make a determination that an unjustified or 
unwarranted personnel action has occurred. This can and already happens 
today without specific regulatory language discussing what collective 
bargaining agreements can and cannot do in this situation or other 
employment situations that are subjects of negotiated grievances. 
Therefore, OPM is not revising the regulatory language based on this 
comment.
    Even with the revisions to paragraph (c)(2)(iii), OPM's 
interpretation of 5 CFR 335.103 will continue 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.
    As discussed in the proposed rule and repeated in this final rule, 
the merit system principles (MSPs) \11\ are nine basic standards that 
govern the management of the executive branch

[[Page 60295]]

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 \12\ 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--managing employees in the short-
term and long-term public interest.\13\ 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. 5 
U.S.C. 2301(b)(1). 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.'' \14\ Therefore, OPM 
continues to believe 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.
---------------------------------------------------------------------------

    \11\ See 5 U.S.C. 2301(b) for the enumerated merit system 
principles.
    \12\ See 5 U.S.C. 2302: Prohibited personnel practices.
    \13\ See 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.
    \14\ Id.
---------------------------------------------------------------------------

    Notwithstanding the addition of the new paragraph (c)(2)(iii), 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-graded position 
without following applicable competitive procedures. Under this final 
regulation, agencies are reminded that they may be required to provide 
higher compensation as a result of a determination by an appropriate 
authority as defined in 5 CFR 550.803 and discussed in greater detail 
above.
    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. To be clear, 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.\15\
---------------------------------------------------------------------------

    \15\ 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).''
---------------------------------------------------------------------------

    Finally, OPM reminds agencies that 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. Still, 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. 
These agencies often have bargaining unit employees who may be covered 
by collective bargaining agreement provisions outlining when an 
employee should receive a time-limited promotion.

III. Regulatory Analysis

A. Statement of Need

    OPM is issuing this final rule for two purposes. First, OPM reminds 
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 rule provides the possibility of 
remedial relief to bargaining unit employees covered by collective 
bargaining agreements requiring temporary promotions and to non-
bargaining unit employees when an appropriate authority makes a 
determination to provide a retroactive time-limited promotion, usually 
in response to a grievance or complaint.
    OPM's interpretation that competitive procedures must be followed 
for temporary promotions exceeding 120 days has not changed from what 
was stated in the proposed rule. Notwithstanding OPM's interpretation 
of these requirements in 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. 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 has modified 5 CFR 335.103 to address these 
scenarios.
    This 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.'' Executive Order 14003, Protecting the Federal Workforce 
(86 FR 7231, Jan. 22, 2021). As NTEU stated in its petition to OPM, 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.
    NTEU also noted 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

[[Page 60296]]

whomever is available and convenient.'' NTEU noted 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 this final rule is 
a reasonable solution to address those situations where an agency has 
assigned higher-graded duties to an employee without using competitive 
procedures, a collective bargaining agreement requires a temporary 
promotion, and an appropriate authority has determined a retroactive 
promotion is an appropriate remedy. Likewise, OPM believes this final 
rule provides a reasonable solution to address similar situations for 
non-bargaining unit employees where an appropriate authority, such as 
the EEOC, has determined the employee's rights were violated.

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 an equitable 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.\16\ 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.
---------------------------------------------------------------------------

    \16\ OPM oversight activities--www.opm.gov/policy-data-
oversight/oversight-activities.
---------------------------------------------------------------------------

    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 having 
been given a time-limited promotion where OPM's regulations were not 
properly followed.

C. Impact

    OPM is issuing this final rule to authorize a retroactive temporary 
promotion when a competitive service employee, effectively, has been 
detailed or temporarily promoted to higher-graded 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 determination by an 
appropriate authority. 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 
certain circumstances, such as when a collective bargaining agreement 
requires a temporary promotion and pursuant to an order by an 
appropriate authority, such as an arbitrator. 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 determination by an 
appropriate authority.
    OPM reminds agencies to use competitive procedures when assigning 
an employee duties of a higher-graded position when the assignment 
exceeds 120 days. This is not a new requirement and simply reinforces 
what agencies, subject to 5 CFR part 335, should already be doing and 
should have no impact. 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 employment policies, particularly 
those related to temporary promotions, and the employee pursues a 
grievance or complaint processes which may be available.

D. Costs

    OPM received one comment from an individual commenter regarding the 
estimated costs of the proposed rule. Comment 0004. The commenter 
stated that OPM's notice assumed a rate of 200% the pay rate but the 
commenter believes this rate may be higher (or lower) than the cost of 
government civilian manpower. The commenter points to a ``Full Cost of 
Manpower'' tool used by the Department of Defense, which the commenter 
believes may be more accurate or appropriate for estimations. They 
recommended exploring the tool as a basis for any cost estimates.
    OPM thanks the commenter for their suggestion but will not be 
revising its estimated costs based on this comment. OPM recognizes that 
costs may vary by agency and is only providing an estimated Government-
wide cost. OPM cannot estimate costs with great specificity because 
they will vary depending on the number of times an agency may assign 
higher grade duties to employees that result in a decision on a 
grievance or complaint providing a retroactive time-limited promotion. 
Each agency will need to consider the potential costs of this final 
rule based on their unique circumstances and the practices and tools 
used by that agency. The economic assessment is finalized with no 
changes other than updates to salary costs based on 2024 average salary 
rates.
    This rule will affect the operations of approximately 80 Federal 
agencies in the executive branch--ranging from cabinet-level 
departments to small independent agencies. We do not believe this rule 
will substantially increase the ongoing administrative costs to 
agencies as this rule leverages existing procedures and requires 
agencies to comply with collective bargaining agreements that they have 
made with unions (where applicable). Likewise, there may be other 
agency policies that impact time-limited promotions. Furthermore, OPM 
believes costs will be negligible. Agencies should be able to leverage 
existing resources to implement the reminders in this rule and the 
regulatory requirements.

[[Page 60297]]

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. Therefore, OPM has determined that finalizing this rule 
is not dependent on whether our cost estimate is accurate for any 
specific agency. As discussed earlier, OPM believes this final rule is 
a reasonable solution to address those situations where an agency has 
assigned higher-graded duties to an employee without using competitive 
procedures, a collective bargaining agreement requires a temporary 
promotion, and an appropriate authority has determined a retroactive 
promotion is an appropriate remedy. Likewise, OPM believes this final 
rule provides a reasonable solution to address similar situations for 
non-bargaining unit employees where an appropriate authority, such as 
the EEOC, has determined the employee's rights were violated. At the 
same time, the rule supports merit system principles by reminding 
agencies to use competitive procedures for time-limited promotions 
exceeding 120 days.
    With the above in mind, we estimate this rule will require agencies 
to review their 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 final 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 Sec.  335.103 is one executive; one 
GS-15, step 5; one GS-14, step 5; and one GS-13, step 5 in the 
Washington, DC, locality area. The 2024 basic rate of pay for an 
executive at an agency with a certified SES performance appraisal 
system is $246,400 annually, or $118.06 per hour. For General Schedule 
employees in the Washington, DC, locality area, the 2024 pay table 
rates are $185,824 annually and $89.04 hourly for GS-15, step 5; 
$157,982 annually and $75.70 hourly for GS-14; and $133,692 annually 
and $64.06 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 $236.13 for an executive; $178.08 for a GS-15, step 5; $151.40 
for a GS-14, step 5; and $128.12 for a GS-13, step 5. In order to 
comply with the regulatory changes in this final 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 $173.43. This would result in 
estimated costs of about $1,734 per agency, and about $138,720 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 or backpay is provided in other forums, 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 did not receive any comments on the implementation and 
impacts of the rule beyond what was discussed above.

E. Benefits

    This final 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. 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.
    On the other hand, 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 awards the employee a retroactive temporary promotion. 
Therefore, the second benefit of this rule 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 
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 agreements when they agreed to 
temporarily promote employees. This final rule not only reinforces 
merit system principles for bargaining unit and non-bargaining unit 
employees but reinforces the agency's obligations under the Federal 
Service Labor-Management Relations Statute for bargaining unit 
employees.
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 rule does not 
reach that threshold but has otherwise been designated by the Office of 
Management and Budget (OMB) as a ``significant regulatory action'' 
under section 3(f) of Executive Order 12866, as supplemented by 
Executive Orders 13563 and 14094.
Regulatory Flexibility Act
    The Director of OPM certifies that this rule will not have a 
significant economic impact on a substantial number of small entities 
because it applies only to Federal agencies and Federal employees.
Federalism
    This regulation 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 regulation does not have 
sufficient federalism implications to warrant preparation of a 
Federalism Assessment.
Civil Justice Reform
    This regulation meets the applicable standard set forth in 
Executive Order 12988.

[[Page 60298]]

Unfunded Mandates Reform Act of 1995
    This 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.
Congressional Review Act
    The Office of Information and Regulatory Affairs in the Office of 
Management and Budget has determined that this rule does not satisfy 
the criteria listed in 5 U.S.C. 804.
Paperwork Reduction Act of 1995 (44 U.S.C. 3501-3521)
    This regulatory action will not 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 amends 5 
CFR part 335 as follows:

PART 335--PROMOTION AND INTERNAL PLACEMENT

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

    Authority:  5 U.S.C. 2301, 2302, 3301, 3302, 3304(f), 3330, 
9602; sec. 511, Pub. L. 106-117, 113 Stat. 1575; E.O. 10577, 3 CFR, 
1954-1958 Comp., p. 218; E.O. 11478, 3 CFR, 1966-1970 Comp., p. 803, 
unless otherwise noted; E.O. 13087, 3 CFR, 1998 Comp., p. 191; E.O. 
13152, 3 CFR, 2000 Comp., p. 264; and 5 CFR 2.2 and 7.1.

Subpart A--General Provisions

0
2. Amend Sec.  335.103 by:
0
a. Removing the word ``and'' at the end of paragraph (c)(2)(i);
0
b. Removing the period at the end of paragraph (c)(2)(ii) and adding 
``; and'' in its place; and
0
c. Adding paragraph (c)(2)(iii).
    The addition reads as follows:


Sec.  335.103  Agency promotion programs.

* * * * *
    (c) * * *
    (2) * * *
    (iii) A retroactive temporary promotion to a higher-graded position 
pursuant to a determination by an appropriate authority as defined in 5 
CFR 550.803.
* * * * *
[FR Doc. 2024-16030 Filed 7-24-24; 8:45 am]
BILLING CODE 6325-39-P