The Office of Personnel Management (OPM) issued a final rule Tuesday eliminating the use of non-federal salary history in establishing pay for job offers to federal employees.
The final rule, published in the Federal Register, notes that agencies may not use non-federal salary histories when establishing pay for employees in General Schedule, prevailing rate, Administrative Appeals Judge, Administrative Law Judge, Senior Executive Service and senior-level and scientific or professional pay systems.
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The rules states:
“For individuals receiving their first appointment as a civilian employee of the Federal Government (or a reappointment after a break in service) in one of these pay systems, agencies will not be able to set pay based on a job candidate’s non-Federal salary or pay history, which could vary between equally qualified candidates, or based on a competing job offer.
Agencies will also be required to have policies regarding setting pay based on a previous Federal salary for employees who have previous civilian service in the Federal Government.”
This final rule is effective April 1, 2024. Agencies must be in full compliance with this final rule not later than October 1, 2024.
The rule also mentions, “salary history is not necessarily a good indicator of worker value, experience, and expertise, and it also may contain or exacerbate biases. Pay setting based on salary history may be inequitable, can perpetuate biases from job to job, and may contribute to a pay gap between the earnings of men and women.”
Agencies also will not be permitted to consider a candidate’s competing job offer when setting pay. Agencies will be required to have policies regarding setting pay based on a previous Federal salary for employees who have previous federal civilian service.
To read the full ruling from OPM, go here.