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August 4, 2005


“Working for America Act of 2005”
won’t work for a non-partisan, professional civil service

“Sit and read. Prepare yourself for the coming conflicts.”
Mary Harris “Mother” Jones (1837-1930)

     This ENews Alert is in response to the broadcast voice mail message most of us received last week from Deputy Secretary Bernardi, and to the information posted on the HUD website. We’re asking you to sit and read, to better understand the impact of the Administration’s proposal. We’re also asking you to respond to the Administration’s request for input, including copying your representatives and senators.

     The Act covers a lot: from performance to pay, hiring to probationary periods, right to appeal decisions to right to bargain changes in working conditions. Because there is so much and we know that you’re busy with end of the fiscal year goals, we’re presenting the information in manageable portions. At this time we’re planning the following ENews Alerts about the Act:

Impact on Basic Pay (below)
Revisions to the Classification system (scheduled for next week)
Changes to Performance Management systems
Modifications to the right to representation and the right to bargain

Impact on Pay

The current pay system has three parts:

1 and 2. Annual pay raises, with locality adjustments: Yearly, the Administration proposes and Congress determines the basic annual pay increase. A portion of this amount is set aside for locality pay adjustments under the Federal Employee Pay Comparability Act (FEPCA). All employees with a fully satisfactory rating or above receive the annual pay raise. Employees with marginal or unsatisfactory ratings receive half or none of the pay raise. Because Congress determines the pay raise, it is not guaranteed (in some years it has been eliminated or delayed). However, because we are all constituents, we have the right to lobby Congress for annual pay raises. We have been very successful in recent years securing amounts in excess of what the Administration has proposed.

3. Step Increases: These are also known as seniority raises, rewarding employees for length of service, and potentially for outstanding performance. The process for receiving Step Increases is already in place and is not subject to yearly agreement between the Administration and Congress. To receive a seniority raise, an employee must be performing at the fully satisfactory level. Employees with marginal or unsatisfactory ratings receive no step increases. At its discretion, Management may reward employees for outstanding performance by accelerating their step increases. HUD has declined to use this method of “pay-for-performance” for many years.

The proposed system has two parts:

1. Annual pay raises: Rather than having grades and steps, the proposed system will have “pay bands” with a minimum and maximum rate. There is no predetermined basis for deciding where an employee falls within the band (i.e. length of service). Agencies will have an annual “pay pool” out of which employees will receive annual raises provided they receive fully satisfactory ratings. Employees receiving better than fully satisfactory ratings are eligible for higher raises, provided they stay within the maximum pay allowed by the pay band.

Things to know—

* Agencies establish the amount in the pay pool. Keep in mind that the amount set aside by HUD for raises in 2006 is 2.4%, less than the amount Congress has authorized to date (3.1%).

* Agencies can establish different pay pools for different groups of employees, i.e. management vs. employees, CPD vs. Housing, or Headquarters vs. Field. Remember that it was only a few years ago that HUD attempted to establish different performance awards by cylinder, but the Union successfully argued for equity across cylinders.

* Only employees in the “Full Performance” and “Senior Expert” bands are guaranteed the opportunity to be rated higher than fully successful, and thus receive higher annual raises. The Full Performance level is currently the top of an employee’s career ladder. Under the Act, employees who are not yet at the top of their career ladder could be rated under a system that doesn’t include Highly Successful or Outstanding, thus limiting them to a “Fully Successful” pay raise for years.

2. Changes to pay bands and locality adjustments: OPM will determine the minimum and maximum pay for each pay band, in each geographic area. Periodically, OPM will adjust the minimum and maximum, based upon variables that include the availability of funds. If a band is adjusted upwards, all fully successful employees in the band will receive a raise equal to the percentage value of the increase to the minimum pay band level.

Things to know:

* There is no requirement that adjustments be done annually. It is solely at the discretion of OPM

* There is no requirement that adjustments be done equitably. In fact, the Act specifically states that OPM can provide different rate adjustments for different bands, and can adjust the minimum and maximum by different percentages.

* There is no requirement that locality differentials apply to all employees in a locality. OPM can choose to exclude some bands from the locality adjustment.

* And all of this is subject to the availability of funds. With a $300 billion deficit and trillions in debt, . . ..

     In short, brothers and sisters, this part of the Act is about holding down federal employee pay. Even if the system were 100% fair, you can bet that you’ll receive less in pay—and consequently less in TSP contributions and retirement.

     The Administration may try to make you feel better by including language in the Act prescribing that, for the first five years, the pay pools be at least equal to the “historical average aggregate funds expended for periodic step increases” (at Section 5252(b)(3)(A)). Don’t be fooled. Agencies won’t have to include the historical average of regular annual pay raises—only step increases. And after five years, they don’t even have this floor for pay pool calculation.

Next week: Revisions to the Classification system—HUD employees already labor without grade parity and without much recourse. Will that change? Tune in next week.

This Council 222 E:Alert was written by Carolyn Federoff, President, Council 222.
E:mail comments or suggestions to: AFGE COUNCIL 222/ADMIN/RIC/HUD@hud.gov or just hit reply