According to a recent OPM news release, “the U.S. Office of Personnel Management (OPM) released a final regulation that prohibits the use of previous non-federal salary history in setting pay for federal employment offers. Under the final regulation, federal agencies cannot consider an applicant’s non-federal salary history when setting pay for new federal employees.”
Limitations on the Regulation
The release goes on to state, “Under the final regulation, agencies will no longer be able to set pay based on non-federal salary history for those who are joining the federal government for the first time or are returning after a break in federal service. Agencies also will not be permitted to consider the salary in a candidate’s competing job offer when setting pay.”
The Recruiter’s Conundrum
I recruited for the Federal Aviation Administration (FAA) for many years during my over 35 years of federal service. In many cases, those applying for federal jobs were able to negotiate a higher starting salary that would at least equal or be slightly higher than the pay they were making in their previous non-federal job.
The General Schedule (GS) pay tables break down each GS pay grade into 10 steps. When recruiting for a position, the salary is typically advertised at the step 1 pay grade through step 10. For example, an agency advertising for a mechanical engineer at the GS-11/12 pay grade in the Pittsburgh, Pennsylvania area, the salary range would be $75,013 (GS-11, step-1) to $116,879 for a (GS-12, Step-10).
Applicants must meet the qualifications for the grade applied for. In this case, if he/she only meets the qualifications for the GS-11 grade, they would have to start at step-1, $75,013. If they met the qualifications for a GS-12 grade, their starting salary would be $89,910, step-1 for the GS-12 pay grade.
Under this new system, there is no way to match a potentially higher qualified applicant’s salary.
This new directive assumes that an agency can arbitrarily hire someone at a lower starting salary than step-1 of the grade applied for. That never happens! Once a federal job is advertised at a certain pay grade, all who apply would be offered the same step-1 starting salary at the grade they meet the qualifications for! A person’s previous salary has nothing to do with the starting pay of any advertised federal position.
OPM Director Kiran Ahuja states in the OPM news release, “Relying on a candidate’s previous salary history can exacerbate preexisting inequality and disproportionally impact women and workers of color. With this regulation, the Biden-Harris Administration sets a new standard and demonstrates to the nation that we mean business when it comes to equality, fairness, and attracting the best talent.”
This new rule, from my viewpoint and experience, makes it harder for agencies to hire the best qualified for a position and will end up excluding the most qualified, no matter what race or gender they are.
The End Result
There are highly qualified applicants in all groups who could be negatively impacted by this new rule. Typically, when a private sector applicant applies for a federal position, they are often earning over the step-1 pay. Especially those who are older and potentially more qualified, and have been working in the occupation for a number of years.
They see the salary range and assume they would be starting at or above what they are currently making. Many today, due to high inflation and cost of living, are unable to take a pay cut just to get their foot in the door.
In the past, applicants could ask to have their starting pay raised to what they were making in their previous job, a recent pay stub was required to document their earnings. Agencies could adjust their starting salary to the closest step within that GS grade to encourage them to take the position.
This wasn’t automatic, an applicant had to ask, prior to officially accepting the position. The agency had to request permission to grant their request if the increase would take them above step-4 in the grade.
From my personal experience, this will exclude many highly qualified applicants from accepting a job offer just when the government is finding it difficult to recruit across the board in many occupations, especially with STEM positions.