Critical Position Pay Authority

Issuing agencies

Abstract

The Office of Personnel Management (OPM) is amending its regulations governing the critical position pay (CPP) 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. The final rule eliminates non-statutory caps and approval criteria; addresses the use of service agreements; clarifies that reductions or terminations of CPP are not adverse actions or subject to grievance or appeal rights; and clarifies the treatment of critical pay rates as basic pay. This final 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 164 (Wednesday, August 26, 2026)</title>
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[Federal Register Volume 91, Number 164 (Wednesday, August 26, 2026)]
[Rules and Regulations]
[Pages 54937-54941]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-17442]



========================================================================
Rules and Regulations
                                                Federal Register
________________________________________________________________________

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. 

========================================================================


Federal Register / Vol. 91, No. 164 / Wednesday, August 26, 2026 / 
Rules and Regulations

[[Page 54937]]



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:  Final rule.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management (OPM) is amending its 
regulations governing the critical position pay (CPP) 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. The final rule eliminates non-statutory caps and 
approval criteria; addresses the use of service agreements; clarifies 
that reductions or terminations of CPP are not adverse actions or 
subject to grievance or appeal rights; and clarifies the treatment of 
critical pay rates as basic pay. This final rule simplifies and better 
aligns OPM's regulations with governing law and delegated authority.

DATES: Effective date: This regulation is effective August 26, 2026. 
OPM is waiving the 30-day delayed effective date under 5 U.S.C. 
553(d)(1), as this rule relieves restrictions that are not required by 
statute.

FOR FURTHER INFORMATION CONTACT: Kristen Foy by telephone at (202) 606-
2858 or by email at <a href="/cdn-cgi/l/email-protection#cabaabb3baa5a6a3a9b38aa5baa7e4ada5bc"><span class="__cf_email__" data-cfemail="3e4e5f474e5152575d477e514e5310595148">[email&#160;protected]</span></a>.

SUPPLEMENTARY INFORMATION: On April 24, 2026, OPM issued a proposed 
rule (91 FR 22070) to amend the CPP regulations under 5 CFR part 535 
and adverse action regulations at 5 CFR part 752. The proposed rule had 
a 30-day comment period ending May 26, 2026. OPM received one 
substantive comment and is adopting the proposed rule without change.

Background

    Section 5377 of title 5, United States Code, authorizes CPP 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, 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 CPP authority. Section 535.103 describes the circumstances under 
which an agency head may exercise CPP authority and sets the 
limitations on pay rates that may be established. Under prior 
regulations, 5 CFR 535.103(a) provided 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 CPP authority. Under the law, an 
agency may request CPP only to the extent necessary to fill a position 
with an exceptionally well-qualified individual.

History

    The current CPP 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 CPP 
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 CPP.
    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 Executive Order (E.O.) 13415 (71 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 prior regulations 
inconsistent with the delegation framework established by E.O. 13415.

Amendments to the Critical Position Pay and Adverse Actions Regulations

    This final rule amends OPM's regulations governing the CPP 
authority under 5 CFR part 535 and related adverse action regulations 
under 5 CFR part 752. The amendments align OPM's regulations with the 
governing statute at 5 U.S.C. 5377 and the President's delegation of 
authority under E.O. 13415, while simplifying administration of the CPP 
authority and removing certain non-statutory requirements.
    This rule revises 5 CFR 535.103 and 535.104 to remove the 
requirement for

[[Page 54938]]

case-by-case Presidential approval of critical pay rates above EX-I. 
E.O. 13415 delegates to the Director of OPM the President's authority 
under 5 U.S.C. 5377(d)(2) to provide written approval of such rates. 
Approval authority for rates above EX-I therefore resides with the 
Director of OPM, who provides that written approval in consultation 
with OMB, and without the need for separate Presidential approval.
    This rule also removes the ``rare circumstances'' and ``exceptional 
circumstances'' criteria from 5 CFR 535.103 through 535.105. These 
criteria were created by regulation, were not defined in regulation, 
and were not required by statute. In practice, they were difficult to 
apply and served as an artificial barrier to appropriate use of the 
authority. 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. Under the revised 
regulations, EX-I serves as the default maximum rate, and rates above 
EX-I require written approval by the Director of OPM based on 
objective, evidence-based justification.
    This rule also removes the requirement in Sec.  535.104(b) that 
agencies submit requests covering multiple positions in priority order, 
and revises (a) to clarify that the agency head has sole and exclusive 
discretion in determining whether and how to use the CPP authority.
    This rule amends 5 CFR 535.106 to clarify that a critical pay rate 
is not considered a rate of basic pay for purposes of the General 
Schedule (GS) pay administration rules in 5 CFR part 531, subpart B. 
New paragraph (c) preserves the existing exception in Sec.  
531.221(a)(4), under which a critical pay rate may be treated as a non-
GS rate of basic pay in applying the GS maximum payable rate rule. This 
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 when doing so produces a higher payable rate than the normal 
GS pay-setting rules.
    This rule adds new paragraph (e) to 5 CFR 535.103 authorizing 
agencies to require employees to sign written service agreements 
governing future payments of CPP. OPM may also require an agency to 
establish a service agreement as a condition of approving critical pay 
authority and may specify the matters such an agreement must address.
    New paragraph (f) to 5 CFR 535.103 clarifies that an employee has 
no right to grieve or appeal a decision to reduce, not increase, or 
terminate a CPP rate, although nothing in this paragraph limits any 
right or remedy provided by another applicable law. This rule also 
amends 5 CFR part 752 by adding Sec.  752.401(b)(18) to clarify that a 
reduction or termination of a CPP rate is not an adverse action under 
chapter 75 when the employee was informed that the rate is approved on 
a time-limited basis, subject to annual review and reapproval, and may 
be reduced or terminated if no longer needed. This exclusion reflects 
that CPP is a discretionary, time-limited pay-setting framework under 5 
U.S.C. 5377, rather than a disciplinary ``reduction in pay'' that 
triggers chapter 75 procedures and Merit Systems Protection Board 
appeal rights. It uses the same ``notice and limited duration'' 
approach already employed elsewhere in part 752 (see, e.g., Sec.  
752.401(b)(12) (termination of temporary or term promotions)). This 
amendment is also consistent with 5 U.S.C. 5377(e), which authorizes 
OPM to prescribe the terms and conditions under which CPP authority is 
exercised and terminated.
    The provisions of this rule are severable. The amendments address 
distinct aspects of the administration of the CPP authority and are 
designed to operate independently consistent with 5 U.S.C. 5377. If any 
provision is held invalid or unenforceable, the remaining provisions 
are intended to remain in effect. 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.

Comments Received on the Proposed Rule

    Commenter 0002 expressed general support for aligning the CPP 
regulations with the delegation framework established by E.O. 13415. 
The commenter noted that transferring approval authority for pay rates 
above the rate for level I of the Executive Schedule from the President 
to the Director of OPM would reduce processing time and administrative 
burden for agencies. The commenter also acknowledged that removing the 
``rare circumstances'' threshold would likely increase the volume of 
agency requests and make the CPP authority a more competitive tool 
relative to other pay flexibilities. The commenter cautioned that 
increased utilization could cause agencies to approach the statutory 
cap of 800 critical pay positions more quickly and urged OPM and OMB to 
maintain rigorous oversight to ensure approvals remain limited to truly 
critical, high-impact roles.
    OPM agrees with the commenter's general assessment. Consolidating 
approval authority through OPM, in consultation with OMB, and removing 
the ``rare circumstances'' and ``exceptional circumstances'' criteria 
are expected to reduce administrative burden, make the authority more 
accessible to agencies with mission-critical staffing needs, and make 
critical pay a more competitive compensation tool. OPM acknowledges the 
concern that these changes may result in an increased number of 
requests and approvals that reach the 800-position limit in statute 
more quickly without proper oversight. OPM is not changing the 
regulations in response to the commenter's cautions. Several existing 
requirements and factors will constrain utilization and promote 
oversight: the requirement that critical pay requests be approved by 
OPM, in consultation with OMB under 5 U.S.C. 5377(c); the statutory 
requirement that critical pay be used only to the extent necessary to 
recruit or retain an exceptionally well-qualified individual under 5 
U.S.C. 5377(b); and the requirement for objective market-based 
justification and the written approval of the Director of OPM for all 
rates above EX-I. In addition, OPM will continue to monitor utilization 
through its annual report to Congress under 5 U.S.C. 5377(h) and 5 CFR 
535.107.

Regulatory Impact Analysis

Statement of Need

    OPM is issuing this final 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 CPP 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 2025, OPM continued to authorize CPP for 65 
positions in 15 agencies. However, only 9 of those agencies reported 
using the CPP

[[Page 54939]]

authority during 2025 for 25 total incumbents.
    On May 29, 2026, the President issued a memorandum titled 
``Approving Critical Position Pay Authority for National Security 
Investment Workforce,'' authorizing the use of CPP for up to 400 
positions supporting investment programs related to national security 
and authorizing OPM, in consultation with OMB, to approve agency 
requests at rates of basic pay of up to $400,000, consistent with 
market comparability and national security urgency. See <a href="https://www.whitehouse.gov/presidential-actions/2026/05/approving-critical-position-pay-authority-for-national-security-investment-workforce/">https://www.whitehouse.gov/presidential-actions/2026/05/approving-critical-position-pay-authority-for-national-security-investment-workforce/</a>. 
These 400 positions are subject to the 800-position Governmentwide 
statutory cap under 5 U.S.C. 5377(f). OPM, in consultation with OMB, 
will allocate the positions to executive departments and agencies and 
oversee their use to ensure CPP is used only to the extent required to 
recruit or retain exceptionally well-qualified individuals consistent 
with 5 U.S.C. 5377(b).
    Considering the combined effect of existing authorizations, the May 
29, 2026, Presidential memorandum, and the changes made by this final 
rule, OPM anticipates an increase in use of the CPP authority compared 
to historical levels. However, given the statutory cap of 800 positions 
Governmentwide and the targeted nature of approved positions, OPM does 
not anticipate that this final rule will substantially impact local 
economies or have a large impact on local labor markets.

Costs

    OPM expects that the amendments in this final rule may result in 
some increase in the use of the CPP authority, including 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 reduce administrative barriers and make the 
authority more accessible to agencies.
    In the proposed rule, OPM presented an illustrative cost estimate 
based on the statutory cap of 800 authorized positions Governmentwide, 
assuming up to one-half could be approved above EX-I at an average 
increase of $50,000 to $100,000 per position. The May 29, 2026, 
Presidential memorandum described in the Impact section above now 
represents the most significant driver of utilization above EX-I and 
provides a more defined basis for estimating cost impacts. OPM has 
therefore updated its estimate to reflect the parameters established by 
that memorandum.
    OPM has developed an estimated cost range based on assumptions 
about how many of the 400 authorized positions will be filled. Each 
position filled at the $400,000 maximum rate would carry an incremental 
cost above EX-I of approximately $146,900 annually. On that basis, OPM 
estimates aggregate incremental costs ranging from approximately $44.1 
million annually as a lower bound (if 300 authorized positions are 
filled) to approximately $58.8 million annually as an upper bound (if 
all 400 positions are filled). Actual costs will depend on agency-
specific decisions, including the number of positions ultimately filled 
and the rates at which they are set, and may fall outside this range. 
Average pay rates below the $400,000 ceiling would result in lower 
aggregate costs than the range presented.
    The regulatory changes in this rule may also facilitate above-EX-I 
approvals outside the scope of the May 29, 2026, Presidential 
memorandum. OPM expects any incremental cost beyond the estimate above 
to be modest. Several factors are expected to constrain overall cost 
impact: the 800-position statutory cap, the OPM approval requirement in 
consultation with OMB, budgetary constraints, and the statutory 
``necessary to recruit or retain'' standard under 5 U.S.C. 5377(b).

Benefits

    This final rule eliminates non-statutory procedural constraints, 
improves the timely use of CPP authority for mission-essential roles, 
and reduces administrative burden and approval delays. 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.

Effective Date

    OPM is waiving the 30-day delayed effective date of this 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>; ``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>; and 
``Approving Critical Position Pay Authority for National Security 
Investment Workforce,'' May 29, 2026, available at <a href="https://www.whitehouse.gov/presidential-actions/2026/05/approving-critical-position-pay-authority-for-national-security-investment-workforce/">https://www.whitehouse.gov/presidential-actions/2026/05/approving-critical-position-pay-authority-for-national-security-investment-workforce/</a>.

Regulatory Compliance

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.

[[Page 54940]]

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.

Congressional Review Act

    Subtitle E of the Small Business Regulatory Enforcement Fairness 
Act of 1996 (known as the Congressional Review Act or CRA) (5 U.S.C. 
801 et seq.) requires most final rules to be submitted to Congress 
before taking effect. OPM will submit to Congress and the Comptroller 
General of the United States a report regarding the issuance of this 
rule before its effective date. The Office of Information and 
Regulatory Affairs in the Office of Management and Budget has 
determined that this rule is not a major rule as defined by the CRA (5 
U.S.C. 804).

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 amends 5 CFR parts 535 and 752 as follows:

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. 
Nothing in this paragraph limits any right or remedy provided by 
another applicable law.

0
3. In Sec.  535.104:
0
a. Amend paragraph (b) by removing the second sentence; and
0
b. Revise paragraphs (c) and (d).
    The revisions 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

[[Page 54941]]

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).
    The addition reads as follows:


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) to read as follows:


Sec.  752.401  Coverage.

* * * * *
    (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. 2026-17442 Filed 8-25-26; 8:45 am]
BILLING CODE 6325-39-P


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