Compensation What Managers Need to Know

1
Compensation What Managers Need to Know

• Ellen B. Cook
• Deborah Y. McKissick
• June 2005

2
Agenda

• Policy and Guidance
• Compensation and Staffing
• Premium Pay
• Other Compensation Issues
• Questions

3
Policy and Guidance

• Human Resource Policy Manual
• Human Resource Operating Instructions
• Reference Materials
• Policy Bulletins
• Personnel Reform Information Bulletins

4
Policy and Guidance

• FAA Order 3550.10 Pay Administration
• FAA Order 3550.15 FEPCA
• http//www.faa.gov/ahr/policy/index.cfm

5
Union Contracts

• Information in this briefing is
• supplemented by union contracts
• for bargaining unit employees
• Always review the applicable contract for
• bargaining unit positions

6
Pay Systems

• Core Compensation (FV)
• Negotiated Versions of Core
• Air Traffic Pay (AT)
• FG
• Federal Wage System (FW, FL, FS)
• Executive Compensation

7
Compensation and Staffing
8
Introduction

• You will learn how to use
• the FAA Compensation System to
• Attract the best candidates
• Keep the good ones
• Correctly compensate your employees
• Also refer to the Staffing IVT filling vacancies

9
New Hires/Rehires (contd)

• Superior Qualifications Appointment
• FG First Federal Job
• Usually hired at Step 1
• In unique situations, may be hired
• above the minimum rate
• Approval Authority LOB Head

10
New Hires/Rehires (contd)

• Pay Setting Core Comp
• Pay set anywhere in new band
• Second level manager approval required
• if above first third of band
• New Hire Decision Tool required
• Hired after July 3 no OSI/SCI

11
New Hires/Rehires

• Rehires
• If gone from FAA 6mos
• New Hire Rules
• If gone from FAA
• Set pay at same rate before
• separation

12
New Hires/Rehires

• Recruitment Bonus All Pay Plans
• Hard-to-fill or Special Qualifications
• Up to 25 of base pay
• Single lump sum
• Employee must stay at least 12 months
• Approval Authority LOB Head

13
Internal Hires - All Pay Plans

• Retention Allowance
• Up to 25 of basic pay
• Paid biweekly
• Approval LOB Head
• May be paid when an employee
• would likely leave the Federal government

14
Internal Hires- All Pay Plans

• Relocation Bonuses
• Must permanently relocate and agree to
• stay at least 12 months
• 25 of annual basic pay lump sum
• Hard-to-fill
• Approval LOB head

15
Internal Hires - Core Compensation

• Promotions
• Movement to a higher pay band or
• To a higher equivalent pay band
• Increases may range from 0 to 15
• Must be within pay band
• HRPM COMP 2-6C

16
Internal Hires All Pay Plans

• Promotions (continued)
• Use of Promotion Increase Tool is
• mandatory
• NOTE Flexible promotion increase
• not available for most bargaining
• unit employees.

17
Internal Hires - Core Compensation (contd)

• Reassignments
• To another position in same band, or
• From a position in a different
• pay plan to a position in
• an equivalent pay band
• Generally result in no pay increase

18
Internal Hires - Core Compensation (contd)

• Reassignment increases
• To a new position in same band
• 1-7 average 4-5 per year
• Maximum 20 of reassignments
• Approval Head of LOB/SO
• HRPM Comp 2.8C

19
Internal Hires - Core Compensation (contd)

• Reassignment Increases Criteria
• New position is of greater value
• Considered mission critical
• More responsibility and accountability
• Should be hard-to-fill
• Must have critical skills and be well-qualified

20
Internal Hires - Core Compensation (contd)

• Reassignment Bonuses
• Permanent reassignment new position
• Lump sum1 to 7 of base pay
• Approval Head of LOB/Staff Office
• Minimum one year commitment
• HRPM Comp 2.9C

21
Internal Hires - Core Compensation (contd)

• Reassignment Bonuses Criteria
• Critical to mission
• Hard to fill
• Employee must possess critical skills
• Position must be considered more critical
• than the current job

22
Internal Hires - Core Compensation (contd)

• In-Position Increase
• Significant professional growth
• Increased complexity of current job
• Amount 1-7, average 4-5
• Max 2 per LOB/SO per year
• One per employee per two years

23
Internal Hires - Core Compensation (contd)

• In-Position Increases (contd)
• Completed/approved Decision Tool required
• Must be approved by head of LOB/SO
• HRPM COMP 2.10C

24
Core Compensation - Annual Pay Adjustments

• Combination of OSI and SCI constitute
• one of four pay adjustment levels
• Type of Increase Amount of Increase
• OSI SCI-1 OSI amt 1.8
• OSI SCI-2 OSI amt 0.6
• OSI, no SCI OSI amt
• No increase No increase

25
Core Compensation - Annual Pay Adjustments

• Organizational Success Increase (OSI)
• Based on Flight Plan initiatives
• At least 90 of goals must be
• achieved for 100 OSI payout
• Less than 90 Administrator decides
• Max Payout Amt of GS increase 1

26
Core Compensation - Annual Pay Adjustments
(contd)

• Superior Contribution Increase (SCI)
• First level manager decides
• Higher level manager approves
• Computed on salary before OSI payment
• SCI 1 20 eligible employees
• SCI 2 45 eligible employees

27
Core Compensation - Annual Pay Adjustments
(contd)

• Eligibility for OSI/SCI
• 90 days of FAA service in
• performance year
• Must meet minimum performance requirements
• Must meet minimum conduct requirements

28
Core Compensation - Annual Pay Adjustments
(contd)

• Administrator sets effective date for OSI/SCI
• OSI is added to current base pay
• Lump sum when base pay equals
• or exceeds band maximum
• HRPM Comp 2.21C

29
Core Compensation - Annual Pay Adjustments
(contd)

• Example
• Base Salary before payouts 50,000
• OSI 3
• 50,000 3 51,000
• SCI-2 .6
• 50,000 x .6 300
• 51,000 300 51,800
• 50,000 (3.6) 51,800

30
Core Compensation - Annual Pay Adjustments
(contd)

• Locality Pay Adjustments
• Same as authorized by OPM
• Same date as rest of government
• Usually first full pay period
• in calendar year

31
Moving Between Pay Systems

• Follow the rules of the to pay plan
• FG to FV, FW/FL/FS to FV,
• AT to FV, EV to FV
• FG to FV
• One within grade buyout
• May receive ATRA roll-in one time

32
Moving Between Pay Systems (contd)

• AT to FV
• AT Pay Rules http//www.atpay.faa.gov/
• Refer to Nature of Action types
• Apply appropriate pay rule
• Executive Plans to FV
• Core Plan demotion rules apply

33
Moving Between Pay Systems (contd)

• Wage Plans to FV
• HRPM COMP-2.19C Movement From Wage Grade
  Positions to FV Positions in the Core
  Compensation Plan
• Movement from FV to other FAA pay plans
• Follow rules of to pay plan

34
PREMIUM PAY
35
Fair Labor Standards Act (FLSA)

• Provides minimum standards for wages and overtime
  entitlements for covered employees.
• FAA follows Title 5 5CFR, Part 551
• Premium Pay entitlements often depend on if
  employee is covered (nonexempt) or
• not covered (exempt).

36
Fair Labor Standards Act (contd)

• Covered by FLSA unless meets
• exemption (executive, administrative,
  professional)
• How to determine FLSA status
• HR Specialist can tell you
• Leave and Earnings Statement (FL)
• Block 35 of SF-50

37
Fair Labor Standards Act (contd)

• Managers and HR Specialists jointly
• determine FLSA status of position
• based on duties and responsibilities.

38
Overtime

• Definition Hours of work ordered or
• approved that exceed a FT work schedule
• Authorized in writing or verbally
• Establish policy for requesting OT work
• Paid leave is included as hours of work

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Overtime (contd)

• A number of factors impact payment of OT
• FLSA status
• Work Schedule
• If work is ordered and approved
• Rate of hourly pay

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Work Schedule

• When are extra hours considered OT?
• Traditional/Flexible Schedules (5 days/8hr)
• Hours in excess of 8 a
• day or 40 in a work week
• Flexible Credit hours do not count

41
Work Schedule (contd)

• Compressed Schedule (4/10 or 5-4/9)
• Hours in excess of the scheduled
• for that day 8, 9, or 10 hours a day
• or 80 hours bi-weekly
• Part-Time Hours in excess of a full-time
• schedule

42
Overtime (contd)

• Regular OT Ordered/approved before the start
• of the workweek, or
• Management knew/should have known in
• advance that work was required
• Irregular/Occasional OT Overtime ordered
  /approved after the start of the workweek

43
Overtime (contd)

• Call-Back OT Must report to worksite for
  unscheduled duty
• Paid 2 hrs. OT if works 2 hrs.
• Paid for actual time if works 2 hrs.
• Call-back extends into start or end
• of shift 2 hr. minimum not applicable

44
Overtime (contd)

• Scheduled Telephone/Pager Availability Status
• OT paid only for actual time worked
• Not required to stay at home
• can report to worksite in reasonable
• length of time
• Must report to worksite call-back OT applies

45
Overtime Rate

• Non-Exempt 1 times hourly rate of pay
• and ½ regular rate of pay
• Regular Rate Hourly rate of pay
• and premium/differential earned for
• that week

46
Overtime Rate (contd)

• Exempt
• Hourly rate GS-10/1 or less
• 1 ½ times hourly rate
• Hourly rate more than GS-10/1
• Greater of
• 1 ½ times hourly rate up to GS-10/1 or
• Current hourly rate of pay

47
Overtime and Comp Time

• Regular OT Exempt/Nonexempt
• OT pay is mandatory
• Exception Flexible work schedule
• Employee choice

48
Overtime and Comp Time

• Irregular OT Exempt
• Employee choiceHrly rate GS-10/10
• Mgmt. choice Hrly rate GS-10/10
• Irregular OT Non-exempt
• Employee choice

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Overtime and Comp Time (contd)

• Overtime
• Paid/earned in 1 minute increments
• Compensatory time
• Paid/earned in 1 minute increments
• Balance of 160 hours maximum
• Paid out at the OT rate earned

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Other Premium Pay

• Sunday Premium
• 25 for non-overtime hours regularly scheduled
  and worked
• Calculated on hourly rate w/locality
• Paid in 1 minute increments
• OT worked on a Sunday OT pay only

51
Other Premium Pay (contd)

• Night Differential
• 10 for regularly scheduled hours worked
• between 6pm and 6am
• Includes regular scheduled OT
• Calculated on basic hourly rate w/locality
• Paid in 1 minute increments

52
Other Premium Pay (contd)

• Holiday Pay
• Pay equal to 2 times hourly rate for
• time worked on holiday
• Paid in 1 minute increments
• Up to 8 hours of non-overtime work
• Exception Compressed Schedule 9/10 hrs.

53
Other Premium Pay (contd)

• Holiday Pay -continued
• Sunday and night differential is paid
• in addition to holiday pay
• Part-Time Receives Holiday pay if
• scheduled to work.

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Other Premium Pay (contd)

• Holiday Pay -continued
• RDO not entitled to holiday leave or
• in lieu of day off
• Holiday Leave If an employee can
• be excused, they get holiday leave

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Other Premium Pay

• Holiday Pay - continued
• Called into work when Holiday Leave
• is scheduled
• Holiday pay is substituted for holiday leave.
• Receives a minimum 2 hours of holiday
• pay if less than 2 hours are worked

56
Premium Pay While in Trainingand on Travel
57
Premium Pay and Training

• Overtime and other premium not paid
• for time spent in training
• Exceptions
• During shift for which premium is paid
• Training at night for night only situations
• Cost savings

58
Premium Pay and Training (contd)

• Exception Non-Exempt Only
• Directed to participate in training by
• mgmt. and purpose is to improve
• performance in current position, or
• Outside classroom work ordered by instructor

59
Travel on a Holiday

• Regularly scheduled to work on holiday
• Holiday pay for traveling
• Not regularly scheduled, but directed to travel
• Not entitled to holiday pay for travel
• FLSA status is not a determining factor

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Travel As Hours of Work

• EXEMPT and NONEXEMPT
• Employee may be compensated for
• time spent traveling, outside of
• the scheduled work day if the travel
• is defined as hours worked

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Travel As Hours of Work (contd)

• Travel outside regularly scheduled work day
• hours of work and paid at overtime rate if
• Travel is authorized and
• Meets a qualifying travel situation

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Qualifying OT Travel Situation

• Involves performance of work
• Is incident to travel that involves performance
  of work dead head travel
• Is performed under arduous or
• unusual conditions

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Qualifying OT Travel Situation (contd)

• To event that could not be
• scheduled or controlled administratively
• Inspection of accident site emergency repair
• of navigation system
• FAA or any govt. agency has
• no control over start/stop of event

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Qualifying OT Travel Situation (contd)

• Travel as Incidental Duty
• Reports to work site to pick
• up truck, tools, supplies and goes
• on to work site(s)

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Computing Travel Time

• Automobile
• From duty station to destination
• If directly from home to worksite
• and travel time is greater than
• from duty station to work site
• Receives estimated travel time from duty
  station

66
Computing Travel Time (contd)

• Common Carrier Hours of work
• Usual waiting time prior to flight
• Flight time departure from/arrival to terminal
• May travel early/delay travel by 1 day
• to avoid travel on non-work day
• Cannot travel early/delay 2 days or more

67
Computing Travel Time (contd)

• Travel by a different mode of transportation,
• time, or route than authorized
• OT for travel that is hours of work.
• Credited with the lesser of
• Actual travel that is hours of work OR
• Estimated/authorized if traveled as authorized

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Travel - Hours of WorkFLSA Non-Exempt

• FLSA Non-Exempt regulations provide for more
• travel situations

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Nonexempt Travel Hours of Work (contd)

• Travel within Duty Station limits
• Before/after scheduled work day
• Driver or Passenger AND
• Directly associated with performance of job
  assignment

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Nonexempt Travel Hours of Work (contd)

• Outside Duty Station, before/after work day
• Driver Entitled to OT
• Passenger
• Shares the driving driving time only
• Ordered to perform work, such as
• review paperwork OT for time worked

71
Nonexempt Travel Hours of Work (contd)

• Away from Duty Station, Passenger, Overnight
• Travel during hours on a nonworkday
• that correspond to scheduled work day
• is hours of work

72
Nonexempt Travel Hours of Work (contd)

• Call Back Emergency is outside duty station
• Travel from home to work site
• Compensated only for the hours to travel from
  duty station to work site.

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More Premium Pay
74
Hazardous Duty Pay (HDP)

• All employees except prevailing rate (FV, FG)
• Exposure to a hazard or physical condition
• cannot be adequately reduced or eliminated
• Not part of base pay
• All hours in a pay status on the day of exposure
• Covered in 3550.10, section 3 and appendix 5

75
Environmental Differential Pay(EDP)

• Prevailing Rate Employees (FW, FL, FS)
• Hazard, physical hardship or working condition
  cannot be reduced or eliminated.
• If the exposure is not considered in the grade of
  the position.
• Amount based on Schedule of Pay Differentials.

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EDP (continued)

• Two Types
• Section 1 Actual Exposure
• Section 2 Hours in a pay status
• Documented and approved on time sheet

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Standby Duty

• When an employee must regularly remain
• at or within the confines of the
• duty station for long periods of time.
• Substantial portion of time is spent
• ready to perform work.

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Standby Duty (contd)

• Methods of Payment
• Payment for all hours worked and
• all time in a standby status,
• excluding sleep/meals or

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Annual Premium Pay

• Annual Premium Pay (Exempt Only)
• A percentage of base pay, not to exceed 25,
• for work, standby duty, sleep and
• meals

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Annual Premium Pay

• Replaces
• Regularly scheduled overtime
• Night, holiday, Sunday pay
• When scheduled tour exceeds 40 hrs/week.
• May not exceed 25 of basic pay.
• Determined by schedule (3550.10, sec 9)

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Other Compensation Issues
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Maximum Salary Limit

• An employees maximum salary earned in
• a calendar year depends on
• FLSA status
• Pay Plan

83
Maximum Salary Limit (contd)

• Maximum salary limit for EV, FV, AT
• Annual salary Locality Executive Level II
• (Administrators salary)
• Maximum salary limit does not apply to
• Premium Pay, Bonuses, HDP, EDP
• FG employees have additional limits

84
Maximum Salary Limit (contd)

• FG Employees
• Bi-weekly limit Basic pay and premium
• pay may not exceed the greater of
• FG-15, step 10, with locality, or
• Level V of Executive Schedule

85
Maximum Salary Limit (contd)

• May be waived in certain emergency
• or mission critical situations
• Employees may be paid up to
• aggregate salary limit
• Waiver must be approved by AHR-1

86
Maximum Salary Limit (contd)

• Aggregate Salary Limit Total amount an
• FG employee can earn in a year
• Cannot exceed Level 1 of Executive
• Schedule (currently 180,000)

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Maximum Salary Limit (contd)

• Includes Basic pay, locality pay, premium
• pay, comp time, awards, bonuses, post
  differential, danger pay, COLA, Remote Site
• Pay, Continuation of Pay
• Does Not Include Op Diff, Back Pay,
• Severance pay, Lump-sum annual leave

88
Questions??

• Points of Contact
• Ellen Cook Deborah Y. McKissick
• AHP-300
  AHP-300
• [phone]
  [phone]