Proposed Rule2026-07996
Critical Position Pay Authority
Primary source
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Published
April 24, 2026
Issuing agencies
Personnel Management Office
Abstract
The Office of Personnel Management (OPM) proposes to amend its regulations governing the critical position pay authority to establish level I of the Executive Schedule as the default maximum critical pay rate, with higher rates subject to written approval by the Director of OPM; eliminate non-statutory caps and approval criteria; address the use of service agreements; clarify reductions or terminations of critical position pay are not adverse actions or subject to grievance or appeal rights; and clarify the treatment of critical pay rates as basic pay. This proposed rule simplifies and better aligns OPM's regulations with governing law and delegated authority.
Full Text
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<title>Federal Register, Volume 91 Issue 79 (Friday, April 24, 2026)</title>
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[Federal Register Volume 91, Number 79 (Friday, April 24, 2026)]
[Proposed Rules]
[Pages 22070-22075]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-07996]
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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. 91, No. 79 / Friday, April 24, 2026 /
Proposed Rules
[[Page 22070]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 535 and 752
[Docket ID: OPM-2026-0232]
RIN 3206-AP02
Critical Position Pay Authority
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
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SUMMARY: The Office of Personnel Management (OPM) proposes to amend its
regulations governing the critical position pay authority to establish
level I of the Executive Schedule as the default maximum critical pay
rate, with higher rates subject to written approval by the Director of
OPM; eliminate non-statutory caps and approval criteria; address the
use of service agreements; clarify reductions or terminations of
critical position pay are not adverse actions or subject to grievance
or appeal rights; and clarify the treatment of critical pay rates as
basic pay. This proposed rule simplifies and better aligns OPM's
regulations with governing law and delegated authority.
DATES: Send comments on or before May 26, 2026.
ADDRESSES: You may submit comments using the Federal Rulemaking Portal:
<a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the instructions for submitting
comments.
The general policy for comments from members of the public is to
make them available for public viewing at <a href="https://www.regulations.gov">https://www.regulations.gov</a>
without change, including any personal identifiers or contact
information. However, OPM retains discretion to redact personal or
sensitive information from comments before they are posted.
As required by 5 U.S.C. 553(b)(4), a summary of this rule may be
found in the docket for this rulemaking at <a href="http://www.regulations.gov">www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Kristen Foy by telephone at (202) 606-
2858 or by email at <a href="/cdn-cgi/l/email-protection#f1819088819e9d989288b19e819cdf969e87"><span class="__cf_email__" data-cfemail="3b4b5a424b54575258427b544b56155c544d">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION:
I. Background
Section 5377 of title 5, United States Code, authorizes critical
position pay as a pay-setting flexibility for positions requiring
expertise of an extremely high level in a scientific, technical,
professional, or administrative field and that are critical to an
agency's successful accomplishment of an important mission. Under this
authority, the Office of Personnel Management (OPM), in consultation
with the Office of Management and Budget (OMB), may grant authority to
the head of an agency to fix the rate of basic pay for one or more
positions designated as critical positions. By law, critical pay may be
granted or exercised only to the extent necessary to recruit or retain
an individual exceptionally well qualified for the position. The
critical pay rate fixed by an agency may not be less than the rate of
basic pay (including any locality-based comparability payments) which
would otherwise be payable for the position. OPM, in consultation with
OMB, may approve critical pay authority for no more than 800 positions
at any time, of which not more than 30 may be under the Executive
Schedule.
Consistent with this statute, 5 CFR part 535 establishes the
regulatory framework governing the request, use, and administration of
the critical position pay authority. Section 535.103 describes the
circumstances under which an agency head may exercise critical position
pay authority and sets the limitations on pay rates that may be
established. Under current regulations, 5 CFR 535.103(a) provides that,
subject to approval by OPM in consultation with OMB, an agency head may
set the rate of basic pay for a critical position up to the following
limits: the rate payable for level II of the Executive Schedule (EX-II)
in most cases, the rate payable for EX-I when there are ``exceptional
circumstances,'' or above the rate for EX-I in ``rare circumstances''
and only with the written approval of the President.
Section 535.104 establishes the process and documentation required
for an agency to request use of the critical position pay authority.
Under the law, an agency may request critical position pay only to the
extent necessary to fill a position with an exceptionally well-
qualified individual. For requests seeking to set pay above the rate
for EX-II and up to the rate for EX-I, Sec. 535.104(c) requires
information and data to justify the higher pay. For requests to set pay
above the rate for EX-I, Sec. 535.104(c) states that such requests
require approval by the President. Under current regulations, if OPM,
in consultation with OMB, concurs with a request to set pay above the
rate EX-I, OPM must seek the President's approval, and the President
may establish a maximum limitation on such critical position pay rates.
Since this provision was codified in 2008, no agency has ever requested
critical pay rates above EX-I. While multiple factors may contribute to
this limited use, OPM's experience suggests that burdensome regulatory
requirements, including additional approval layers and undefined
criteria, has contributed to agencies' reluctance to request use of
this flexibility.
II. History
The current critical position pay authority under 5 U.S.C. 5377 was
enacted as part of the Federal Employees Pay Comparability Act of 1990
(Pub. L. 101-509), which allowed OMB to authorize use of the authority
in consultation with OPM. The most significant amendment to this
statute was made by the Federal Workforce Flexibility Act of 2004 (Pub.
L. 108-411) to switch the original roles of OMB and OPM by placing OPM
in charge of decisions to approve agency requests after consulting with
OMB. The law was also amended to authorize OPM to regulate the critical
position pay authority in place of OMB. See 5 U.S.C. 5377(e)(1).
Under 5 U.S.C. 5377, the President holds two functions. Under
paragraph (d)(2), the President must provide written approval to fix
basic pay at a rate greater than the rate payable for level I of the
Executive Schedule. Under paragraph (i)(2), at the request of an agency
head, the President may designate 1 or more categories of positions
within that agency to be treated as positions eligible to receive
critical position pay.
Under 3 U.S.C. 301, the President may delegate certain functions to
other officials within the executive branch. In 2006, the President
expressly delegated his authorities under 5 U.S.C. 5377 to the Director
of OPM in E.O. 13415. (71
[[Page 22071]]
FR 70641). OPM issued final regulations at 5 CFR part 535 governing the
critical pay authority on August 26, 2008, (73 FR 50181) that addressed
OPM's authority under 5 U.S.C. 5377(i)(2) (dealing with expanding the
categories of positions for which the critical pay authority may be
used), as delegated by the E.O. See 5 CFR 535.104(b). However, OPM did
not implement its delegated authority with regard to setting critical
pay rates above the rate for EX-I under 5 U.S.C. 5377(d)(2), making the
current regulations inconsistent with the delegation framework
established by E.O. 13415.
In practice, agencies have relied more frequently on other pay
flexibilities to address recruitment and retention needs. These include
governmentwide authorities such as recruitment, relocation, and
retention incentives under 5 U.S.C. 5753 and 5754, special salary rates
under 5 U.S.C. 5305, and pay-setting flexibilities under the General
Schedule (GS) and other pay systems, as well as agency specific
authorities that provide enhanced pay flexibility for certain
categories of employees. Compared to these other tools, the critical
position pay authority has been used sparingly. Aligning OPM's
regulations with the delegation framework established by E.O. 13415 is
intended to ensure that agencies can more efficiently make use of this
statutory authority, including in conjunction with other available pay
flexibilities, when addressing mission-critical staffing needs.
III. Proposed Changes to OPM's Critical Pay Approval Authority
OPM proposes to revise 5 CFR 535.103 and 535.104 to remove the
requirement for an additional, case-by-case written Presidential
approval for critical pay rates in excess of the rate for EX-I, as the
delegation in E.O. 13415 constitutes that written approval. Under the
proposed rule, approval authority for rates established above EX-I will
reside with the Director of OPM, in consultation with OMB, consistent
with E.O. 13415. OPM also proposes to streamline Sec. 535.104 to
better align the regulatory approval criteria with statutory language.
OPM proposes to remove the ``rare circumstances'' criterion for
approving critical pay rates above the rate for EX-I in Sec. Sec.
535.103 and 535.104. The requirement that rates exceeding EX-I be
established only in ``rare circumstances'' was created by OPM via
rulemaking and is not required by statute. In addition, the regulation
provides no guidance on what constitutes ``rare circumstances.''
Removing this language promotes consistent and transparent
administration of the critical position pay authority while preserving
all statutory criteria governing approval.
OPM acknowledges that removing the ``rare circumstances'' criterion
may result in an increased number of requests for higher pay rates,
reflecting a broader range of situations in which agencies may seek to
use the authority. However, the statutory eligibility criteria under 5
U.S.C. 5377(b) continue to limit use of the authority to positions
critical to an agency's mission and only to the extent necessary to
recruit or retain an exceptionally well-qualified individual. Thus, the
proposed rule replaces undefined and subjective regulatory criteria
with a framework grounded in statutory requirements and supported by
objective, evidence-based justification, including labor market
considerations. This proposed change remains limited by the statutory
scope of the critical position pay authority and allows OPM, in
consultation with OMB and based on an agency head's request, to
determine when critical pay rates are appropriate in each circumstance.
OPM proposes to amend Sec. Sec. 535.103(a), 535.104(c)), and
535.105(b) and (c) to remove the exceptional circumstances criterion
for approving, setting, and adjusting critical pay rates above the rate
for EX-II to the rate for EX-I. The law does not prescribe criteria
that limits critical pay rates above EX-II and the regulations do not
define ``exceptional circumstances.'' In practice, given the statute's
high bar for approving critical pay in 5 U.S.C. 5377(b), ``exceptional
circumstances'' (like ``rare circumstances'') are difficult to identify
and distinguish among eligible positions and thus can serve as an
artificial barrier to appropriate uses of this pay flexibility. Under
the proposed rule, the rate payable for EX-I would serve as the default
maximum rate for critical position pay consistent with the law, with
rates above EX-I requiring written approval by the Director of OPM.
OPM proposes to remove the requirement in Sec. 535.104(b) that
agencies must submit requests covering multiple positions in priority
order. OPM could better address prioritization administratively, if
necessary, in consultation with agencies following submission of
requests. Removing this requirement eliminates an unnecessary
procedural constraint and is consistent with the rule's broader
objective of replacing rigid regulatory requirements with more
flexible, administratively managed processes.
Finally, because critical position pay may be authorized only for
positions ``critical to the agency's successful accomplishment of an
important mission'' (5 U.S.C. 5377(b)), it is essential that the agency
head (or authorized delegee) has sole and exclusive authority in making
the judgment regarding whether and how the critical position pay
authority is used. We have revised Sec. 535.303(a) to reflect this.
IV. Proposed Changes on Treatment as Basic Pay
OPM also proposes to amend 5 CFR 535.106 to clarify that a critical
pay rate is not considered a rate of basic pay in applying the GS pay
administration rules in 5 CFR part 531, subpart B, which apply to GS
rates of basic pay. An employee in a critical pay position is entitled
to a (1) critical pay rate fixed by the agency head or designee under 5
U.S.C. 5377 and 5 CFR part 535 and (2) lower, underlying rate of basic
pay that would otherwise be payable for his or her position if not for
the critical pay authorization. (See 5 U.S.C. 5377(d)(1) and 5 CFR
535.105(a).) For an employee in a GS position receiving critical pay,
the rate that would be otherwise payable is a GS rate of basic pay
authorized under 5 U.S.C. chapter 53, subchapter III and 5 CFR part
531, subpart B. Since a critical pay rate is authorized under 5 U.S.C.
5377 and 5 CFR part 535, it is not a GS rate of basic pay for purposes
of the GS pay administration rules, such as the GS two-step promotion
rule at 5 U.S.C. 5334(b) and 5 CFR 531.214. Proposed new paragraph (c)
also references an exception in Sec. 531.221(a)(4), which currently
allows a critical pay rate to be treated as a non-GS rate of basic pay
in applying the GS maximum payable rate rule in Sec. Sec. 531.221
through 531.223. This pay-setting flexibility would continue and allows
an agency to set pay for an employee in a GS position at a step rate
(not to exceed step 10 of the grade) based on a former critical pay
rate as long as it is higher than the rate the employee is otherwise
entitled to under the normal GS pay-setting rules.
V. Proposed Changes on Service Agreements and Appeal/Grievance Rights
OPM proposes adding a new paragraph (e) to 5 CFR 535.103 to address
the use of written service agreements in connection with critical
position pay.
The proposed regulations would authorize agencies to require that
an employee sign a written service agreement with the agency that
governs
[[Page 22072]]
future payments of critical position pay. Also, OPM would be authorized
to require an agency to establish written service agreement or notice
requirements as part of its determination to approve (or not withdraw)
critical position pay. OPM may specify the matters such a service
agreement or notice must address, such as the position the employee
will hold and the duties the employee is expected to perform; the level
of performance and accomplishments expected; and the factors that an
agency must consider in determining whether to continue, increase,
reduce, or terminate the employee's critical position pay rate.
OPM proposes adding a new paragraph (f) to 5 CFR 535.103 to make
clear that an employee has no right to grieve or appeal a decision to
reduce, not increase, or terminate a critical position pay rate.
Section 535.106(b) already provides that a reduction or termination of
a critical position pay rate is not an adverse action under 5 U.S.C.
7512.
In addition, OPM proposes to amend 5 CFR part 752 to clarify that a
reduction or termination of a critical position pay rate under 5 U.S.C.
5377 does not constitute an adverse action when the employee has been
informed that the rate is time-limited, subject to annual review, and
may be reduced or terminated if no longer necessary. OPM's proposed
addition to the adverse action coverage exclusions in 5 CFR
752.401(b)(18) is intended to clarify that certain reductions or
terminations of a critical position pay rate are part of a
discretionary, time-limited pay-setting and continuation framework
under 5 U.S.C. 5377, rather than a disciplinary `reduction in pay' that
triggers chapter 75 procedures and Merit Systems Protection Board
(MSPB) appeal rights. Section 5377 authorizes OPM to grant critical pay
authority and to determine, under procedures and `terms or conditions'
prescribed by regulation, when that authority should terminate because
the statutory requirements are no longer met. 5 U.S.C. 5377(e)(1).
Consistent with that structure, OPM's current regulation treats a
critical position pay rate as basic pay for most purposes, but provides
that the adverse action provisions (e.g., 5 U.S.C. 7512) do not apply
to critical position pay determinations. See 5 CFR 535.106(b). Proposed
Sec. 752.401(b)(18) reinforces this interpretation directly in the
chapter 75 implementing regulations. It does so using the same ``notice
and limited duration'' approach already employed elsewhere in part 752.
(See, for example, Sec. 752.401(b)(12) (termination of temporary or
term promotions)). If the employee was informed that the critical
position pay rate is approved on a time-limited basis, subject to
annual review and reapproval, and may be reduced or terminated if
determined to no longer be needed, then a later reduction or
termination of the rate is excluded from adverse action coverage. This
exclusion also reflects that, once OPM or the agency determines the
statutory standard is no longer met, continued payment of the higher
rate would be inconsistent with the governing critical pay
determination and implementing regulations, and a prospective
adjustment aligns the rate with what is legally payable.
The proposed amendment to 5 CFR part 752 is also consistent with 5
U.S.C. 5377(e), which authorizes OPM to prescribe the terms and
conditions under which critical position pay authority is exercised and
terminated.
OPM requests comment on these proposals and the potential impacts
on agencies and employees.
VI. Rationale
The proposed amendment modernizes regulatory procedures to
accurately reflect existing delegated authority. The proposed
amendment:
<bullet> Aligns OPM's regulations with 5 U.S.C. 5377 and E.O.
13415;
<bullet> Eliminates non-statutory procedural constraints;
<bullet> Simplifies the regulatory structure by eliminating the EX-
II threshold;
<bullet> Improves the timely use of critical position pay authority
for mission-essential roles;
<bullet> Reduces administrative burden and approval delays;
<bullet> Maintains all statutory oversight safeguards;
<bullet> Provides authority for use of service agreements;
<bullet> Makes clear that an employee has no right to grieve or
appeal a decision to reduce, not increase, or terminate a critical
position pay rate;
<bullet> Clarifies, through conforming amendment to 5 CFR part 752,
that reductions or terminations of critical position pay do not
constitute adverse actions; and
<bullet> Clarifies current pay administration authorities.
This proposed change eliminates undefined and subjective
eligibility criteria and retains the statutory, transparent and
evidence-based eligibility criteria. Critical position pay will
continue to be approved only to the extent necessary to recruit or
retain exceptionally well-qualified individuals. OPM will continue to
monitor appropriate use of authorized critical pay positions through
its annual report to Congress requirement under 5 U.S.C. 5377(h) and 5
CFR 535.107.
OPM intends that the provisions of this rule be severable. If any
provision of this rule is held to be invalid or unenforceable, such
holding is not intended to affect the validity or operation of the
remaining provisions. The amendments in this rule address distinct
aspects of the administration of the critical position pay authority
and are designed to operate independently consistent with 5 U.S.C.
5377. For example, if a court were to find the service agreement
provisions in Sec. 535.103(e) to be invalid or unenforceable, agencies
could continue to apply the revised pay-setting and approval framework
under Sec. Sec. 535.103(a), 535.104, and 535.105 without impact.
Conversely, if a court were to find the pay-setting and approval
framework under Sec. Sec. 535.103(a), 535.104, and 535.105 to be
invalid or unenforceable, agencies could continue to apply the service
agreement provisions in Sec. 535.103(e) without impact.
VII. Regulatory Impact Analysis
Statement of Need
OPM is issuing this proposed rule pursuant to 5 U.S.C. 5377 and
E.O. 13415. The purpose of amending these regulations is to align them
with existing authority delegated to the Director of OPM.
Impact
Under the critical position pay authority, not more than 800
positions may be covered Governmentwide at any one time, and not more
than 30 active authorizations may be for positions otherwise paid rates
of pay under the Executive Schedule. In 2024, OPM continued to
authorize critical position pay for 60 positions in 15 agencies.
However, only 7 of those agencies reported using the critical position
pay authority during 2024 for 10 total incumbents. Based on preliminary
data for OPM's 2025 report, the number of positions using the critical
position pay authority continued to be low.
Considering the limited number of employees that may be affected,
OPM does not anticipate that this proposed rule will substantially
impact local economies or have a large impact on local labor markets.
Costs
OPM expects that the proposed amendments may result in some
increase in the use of the critical position pay authority including
[[Page 22073]]
approval for certain positions at rates above the rate for level I of
the Executive Schedule (EX-I). Removing the requirement for case-by-
case Presidential approval and eliminating the ``rare circumstances''
and ``exceptional circumstances'' criteria may reduce administrative
barriers and make the authority more accessible to agencies.
Because use of the authority is highly case-specific and dependent
on agency mission needs, labor market conditions, and budget
constraints, OPM cannot precisely project the magnitude of any future
increase in utilization. However, OPM has developed a reasonable
illustrative estimate based on the statutory cap of 800 authorized
positions Governmentwide.
For example, if up to one-half of the authorized positions
(approximately 400 positions) were approved at rates above EX-I as a
result of the proposed changes, and if the average increase above EX-I
were between $50,000 and $100,000 per position annually, the resulting
incremental cost to the government could range from approximately $20
million to $40 million per year. This estimate is illustrative and does
not represent a prediction of actual costs to the government. Actual
impacts will depend on agency-specific decisions and workforce needs.
Note that these effects are considered transfers.
There are also several factors expected to constrain the potential
impact. These include the statutory cap on the number of positions
authorized, the requirement for OPM approval in consultation with OMB,
the requirement that agencies justify higher pay based on objective,
market-based evidence, budgetary constraints, the statutory ``necessary
to recruit or retain'' standard in 5U.S.C. 5377(b), and the addition of
service agreements. Agency reports for the statutory annual report to
Congress in 5 U.S.C. 5377(h) and 5 CFR 535.107 will continue to allow
OPM to track and monitor approved critical pay authorizations, and
agencies must continue to address whether their critical pay
authorizations are still needed in their annual reports (see 5 CFR
535.107(a)(5)). Administrative costs as described above will be
incurred to the extent that this flexibility is utilized. Because of
these factors, OPM expects use will remain limited and targeted only to
mission critical positions that will enhance Federal operations when
they are filled with exceptionally qualified individuals.
Benefits
This proposed rule has important benefits. As previously stated,
the proposed amendment eliminates non-statutory procedural constraints,
improves the timely use of critical position pay authority for mission-
essential roles, and reduces administrative burden and approval delays
that might otherwise result.
Effective Date
OPM plans to waive the 30-day delayed effective date of the final
rule pursuant to 5 U.S.C. 553(d)(1), as this rule relieves restrictions
that are not required by statute. Prompt implementation of the final
rule will assist agencies in filling critical skills gaps and meeting
recruitment and retention needs essential to supporting agency
missions. See, e.g., ``Building the AI Workforce of the Future,'' Dec.
15, 2025, available at <a href="https://www.opm.gov/chcoc/latest-memos/building-the-ai-workforce-of-the-future.pdf">https://www.opm.gov/chcoc/latest-memos/building-the-ai-workforce-of-the-future.pdf</a>; and ``Human Resources Flexibilities
for Recruiting and Retaining Information Technology, Cyber, Artificial
Intelligence, and Other Technical Employees,'' Dec. 17, 2025, available
at <a href="https://www.opm.gov/chcoc/latest-memos/human-resources-flexibilities-for-recruiting-and-retaining-information-technology-cyber-artificial-intelligence-and-other-technical-employees.pdf">https://www.opm.gov/chcoc/latest-memos/human-resources-flexibilities-for-recruiting-and-retaining-information-technology-cyber-artificial-intelligence-and-other-technical-employees.pdf</a>.
Regulatory Review
OPM has examined the impact of this rule as required by E.O.s 12866
and 13563, which 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 rules that have an annual effect on the economy of $100
million or more or adversely affect in a material way the economy, a
sector of the economy, productivity, competition, jobs, the
environment, public health or safety, or State, local, or tribal
governments or communities. This rulemaking does not reach that
threshold but has otherwise been designated as a ``significant
regulatory action'' under section 3(f) of E.O. 12866. This rule is not
considered a regulatory action under E.O. 14192 because it imposes no
more than de minimis costs.
Regulatory Flexibility Act
The Director of OPM certifies that this rule would not have a
significant economic impact on a substantial number of small entities
as it would only impact Federal agencies and employees.
Federalism
OPM has examined this rule in accordance with E.O. 13132,
Federalism, and has determined that this rule will not have any
negative impact on the rights, roles and responsibilities of State,
local, or Tribal governments.
Civil Justice Reform
This rulemaking meets the applicable standard set forth in section
3(a) and (b)(2) of E.O. 12988.
Unfunded Mandates Reform Act of 1995
This rulemaking 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 in 1995 dollars, updated annually for
inflation. That threshold is currently approximately $206 million. This
rulemaking 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
This rulemaking does not impose any reporting or record-keeping
requirements subject to the Paperwork Reduction Act.
List of Subjects
5 CFR Part 535
Administrative practice and procedure, Freedom of information,
Government employees, Law enforcement officers, Reporting and
recordkeeping requirements, Wages.
5 CFR Part 752
Administrative practice and procedure, Government employees.
Signing Statement
The Director of OPM, Scott Kupor, reviewed and approved this
document and has authorized the undersigned to electronically sign and
submit this document to the Office of the Federal Register for
publication.
Office of Personnel Management.
Jerson Matias,
Federal Register Liaison.
Accordingly, OPM is proposing to amend 5 CFR parts 535 and 752 as
follows:
[[Page 22074]]
PART 535--CRITICAL POSITION PAY AUTHORITY
0
1. The authority citation for part 535 is revised to read as follows:
Authority: 5 U.S.C. 5377. E.O. 13415, 71 FR 70641, 3 CFR, 2006
Comp., p. 250.
0
2. In Sec. 535.103, revise paragraph (a) and add paragraphs (e) and
(f) to read as follows:
Sec. 535.103 Authority.
(a) Subject to a grant of authority from OPM in consultation with
OMB and all other requirements in this part, the head of an agency may,
in his or her sole and exclusive discretion, fix the rate of basic pay
for a critical position at a rate not less than the rate of basic pay
that would otherwise be payable for the position and not greater than--
(1) The rate payable for level I of the Executive Schedule; or
(2) A rate in excess of the rate for level I of the Executive
Schedule based on information and data that justify the higher rate,
with the written approval of the Director of OPM.
* * * * *
(e) An agency may require an employee to sign a written service
agreement with the agency that governs future payments of critical
position pay. As part of a determination to grant (or not withdraw) an
agency authority to provide a position or positions with critical
position pay, OPM may require the agency to establish written service
agreement or notice requirements for employees receiving critical pay.
OPM may specify the matters such a service agreement or notice must
address such as the position the employee will hold and the duties the
employee is expected to perform; the level of performance and
accomplishments expected; and the factors that an agency must consider
in determining whether to continue, increase, reduce, or terminate the
employee's critical position pay rate.
(f) An employee has no right to grieve or appeal a decision to
reduce, not increase, or terminate a critical position pay rate.
0
3. In Sec. 535.104:
0
a. Revise paragraph (b) by removing the sentence ``Requests covering
multiple positions must include a list of the positions in priority
order.'';
0
b. Revise paragraphs (c) and (d) to read as follows:
Sec. 535.104 Requests for and granting critical position pay
authority.
* * * * *
(c) Requests for critical position pay authority must include
information and data required by OPM to justify the higher pay,
including, as appropriate, market-based justification, evidence of
recruitment and retention needs, and the qualifications of the
individual. The head of an agency must submit such requests to OPM with
the information required in paragraph (d) of this section. If OPM, in
consultation with OMB, concurs with a request to set pay above the rate
payable for level I of the Executive Schedule, the Director of OPM must
provide written approval and may establish a maximum limitation on the
critical position pay rate.
(d) Requests for critical position pay authority must include:
(1) Position title;
(2) Position appointment authority (for Senior Executive Service
positions, appointment authority for any incumbent);
(3) Pay plan and grade/level;
(4) Occupational series of the position;
(5) Geographic location of the position;
(6) Current salary of the position or incumbent;
(7) Name of incumbent (or ``Vacant'');
(8) Length of time the incumbent has been in the position or length
of time the position has been vacant;
(9) A written evaluation of the need to designate the position as
critical. Such an evaluation must include--
(i) The kinds of work required by the position and the context
within which it operates;
(ii) The range of positions and qualification requirements that
characterize the occupational field, including those that require
extremely high levels of expertise;
(iii) The rates of pay reasonably and generally required in the
public and private sectors for similar positions; and
(iv) The availability of individuals who possess the qualifications
to do the work required by the position;
(10) Any additional information the agency may deem appropriate to
demonstrate that higher pay is needed to recruit or retain an employee
for a critical position;
(11) Unless the position is an Executive Schedule position, a copy
of the position description for the critical position; and
(12) The desired rate of basic pay for requests to set pay above
the rate for level I of the Executive Schedule and justification,
including, as appropriate, market-based justification, evidence of
recruitment and retention needs, and qualifications of the individual
to show that such a rate is necessary to recruit and retain an
individual exceptionally well-qualified for the critical position.
0
4. In Sec. 535.105, revise paragraphs (b) and (c) to read as follows:
Sec. 535.105 Setting and adjusting rates of basic pay.
* * * * *
(b) If critical position pay authority is granted for a position,
the head of an agency may initially set pay at an amount up to the rate
payable for level I of the Executive Schedule or other maximum rate
below level I of the Executive Schedule that is approved by OPM in
consultation with OMB. A rate in excess of the rate payable for level I
of the Executive Schedule may be established only with the written
approval of the Director of OPM under Sec. 535.104(c).
(c) The head of an agency may make subsequent adjustments in the
rate of basic pay for a critical position each January at the same time
general pay adjustments are authorized for Executive Schedule employees
under 5 U.S.C. 5318. Such adjusted rates may not exceed the new rate
payable for level I of the Executive Schedule or other maximum rate
approved for the critical position under Sec. 535.104(c). However, the
employee must have at least a rating of Fully Successful or equivalent,
and subsequent adjustments must be based on labor market factors,
recruitment and retention needs, and individual accomplishments and
contributions to the agency's mission. Any adjustment in the rate of
basic pay under this paragraph is also subject to service agreement and
notice requirements established under Sec. 535.103(e), if applicable.
* * * * *
0
5. Amend Sec. 535.106 by:
0
a. Removing the word ``or'' at the end of paragraph (a);
0
b. Removing the period at the end of paragraph (b) and adding ``; or''
in its place; and
0
c. Adding paragraph (c):
Sec. 535.106 Treatment as rate of basic pay.
* * * * *
(c) Application of the General Schedule (GS) pay administration
rules in 5 CFR part 531, subpart B; however, a critical position pay
rate is treated as a non-GS rate of basic pay in applying the maximum
payable rate rule in Sec. Sec. 531.221 through 531.223 of this
chapter, as provided in Sec. 531.221(a)(4).
PART 752--ADVERSE ACTIONS
0
6. The authority citation for part 752 continues to read as follows:
Authority: 5 U.S.C. 6329b, 7504, 7514, 7515, and 7543; 38
U.S.C. 7403. E.O. 10577, 19 FR 7521, 3 CFR, 1954-1958 Comp., p. 218.
0
7. In Sec. 752.401, add paragraph (b)(18):
Sec. 752.401 Coverage.
* * * * *
[[Page 22075]]
(b) * * *
(18) Action by the agency or OPM that reduces or terminates a
critical position pay rate under 5 U.S.C. 5377, if the agency informed
the employee that the rate is approved on a time-limited basis, subject
to annual review and reapproval, and may be reduced or terminated by
the agency or OPM if determined to no longer be needed. (See also
Sec. Sec. 535.106 and 535.107 of this chapter.)
* * * * *
[FR Doc. 2026-07996 Filed 4-23-26; 8:45 am]
BILLING CODE 6325-39-P
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</html>Indexed from Federal Register on April 24, 2026.
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