Setting Pay

Grade and pay retention are management flexibilities allow employees to retain grades and/or rates of basic pay in situations when their compensation would otherwise be reduced provided that certain conditions are met.

Laws, Regulations, and HHS Instruction

• 5 U.S.C. Chapter 53, Subchapter VI, Grade and Pay Retention Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 CFR part 536, Grade and Pay Retention Exit Disclaimer: You Are Leaving www.ihs.gov 
• HHS Instruction 531-2, Setting Salary [PDF - 372 KB]
• HHS Instruction 532-1, Pay Setting for the Federal Wage System [PDF - 381 KB]

OPM Guidance

• Fact Sheet - Grade Retention Exit Disclaimer: You Are Leaving www.ihs.gov 
• Fact Sheet - Pay Retention Exit Disclaimer: You Are Leaving www.ihs.gov 
• Fact Sheet - Pay Retention for Former NSPS Employees Exit Disclaimer: You Are Leaving www.ihs.gov 

Examples and Summaries

• OPM Grade and Pay Retention Examples Exit Disclaimer: You Are Leaving www.ihs.gov 
• Example - Promotion for Employee on Pay Retention Exit Disclaimer: You Are Leaving www.ihs.gov  [DOC]
• Example - Grade Retention, Non-Special Rate to Lower Graded Special Rate Exit Disclaimer: You Are Leaving www.ihs.gov  [DOC]

The maximum payable rate rule allows General Schedule pay to be set pay at a rate above the rate that would be established using normal rules, based on a higher rate of pay the employee previously received in another Federal job.

Laws, Regulations, and HHS Instruction

• 5 CFR 531.221 - 223, Using a Highest Previous Rate Under the Maximum Payable Rate Rule Exit Disclaimer: You Are Leaving www.ihs.gov 
• HHS Instruction 531-2, Setting Salary [PDF - 372 KB]
• HHS Instruction 532-1, Pay Setting for the Federal Wage System [PDF - 381 KB]

OPM Guidance

• Fact Sheet - Maximum Payable Rate Rule Exit Disclaimer: You Are Leaving www.ihs.gov 
• Pay Setting for FWS to GS Movements Exit Disclaimer: You Are Leaving www.ihs.gov 

Examples

• Example - Reappointment Using GS Rate as Highest Previous Rate (HPR) Exit Disclaimer: You Are Leaving www.ihs.gov  [DOC]
• Example - Voluntary Change to Lower Grade Using Highest Previous Rate (HPR) Exit Disclaimer: You Are Leaving www.ihs.gov  [DOC]

There are legal limits to an employee’s basic pay dependent on the employee’s pay system and also on employee’s annual aggregate pay that includes all forms of pay including incentives, premium pay, awards and other similar payments.

• Laws, Regulations, and HHS Instruction

  • 5 U.S.C. 5307, Limitation on Certain Payments Exit Disclaimer: You Are Leaving www.ihs.gov 
  • 5 CFR Part 530, Pay Rates and Systems (General) Exit Disclaimer: You Are Leaving www.ihs.gov 

  OPM Guidance

  • Fact Sheet - Maximum GS Pay Limitations Exit Disclaimer: You Are Leaving www.ihs.gov 
  • Fact Sheet - Aggregate Limitations on Pay Exit Disclaimer: You Are Leaving www.ihs.gov 
  • Guidance on Pay Caps in CYs with 27 Pay Days Exit Disclaimer: You Are Leaving www.ihs.gov 

A promotion occurs when an employee moves from a lower General Schedule (GS) grade to a higher GS grade while continuously employed. Employees must meet specific requirements to be eligible and recipients are determined by management.

Laws, Regulations and HHS Instruction

• 5 U.S.C. 5334 (b) Rate on Change of Position or Type of Appointment; regulations Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 CFR 531.214, Setting Pay Upon Promotion Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 CFR Part 335, Promotion and Internal Placement Exit Disclaimer: You Are Leaving www.ihs.gov 
• HHS Instruction 531-2, Setting Salary [PDF - 372 KB]
• HHS Instruction 532-1, Pay Setting for the Federal Wage System [PDF - 381 KB]

OPM Guidance

• Fact Sheet - Promotions Within the General Schedule (GS) Exit Disclaimer: You Are Leaving www.ihs.gov 
• Questions and Answers on GS Promotions Exit Disclaimer: You Are Leaving www.ihs.gov 

Examples

• OPM - Promotion Examples Exit Disclaimer: You Are Leaving www.ihs.gov 
• Example - Promotion for Employee on Pay Retention Exit Disclaimer: You Are Leaving www.ihs.gov  [DOC]
• Worksheet - Promotion for Employee on Pay Retention Exit Disclaimer: You Are Leaving www.ihs.gov  [DOC]

GS Superior Qualifications or Special Needs Pay-Setting Authority 

General Schedule basic pay may be set at any step higher than the minimum rate (step 1) for newly appointed employees with superior qualifications or if IHS has a special need for their services, provided certain conditions are met.

FWS Appointments Above the Minimum Rate

Federal Wage System basic pay may be set at any step higher than the minimum rate (step 1) for newly appointed employees in recognition of special qualifications, exceptional skills or qualifications, or highly specialized expertise in a particular trade or craft critical to mission accomplishment, provided certain conditions are met.

Note that there are distinctions between the use of these pay flexibilities between the GS and FWS systems, and users should be careful to use the correct form and follow the guidance outlined in the GS and FWS forms and in the HHS Instructions. 

Laws, Regulations, and HHS Instruction

• 5 U.S.C. 5333, Minimum Rate for New Appointments (GS)
• 5 U.S.C. 5343 - Prevailing Rate Determinations; Wage Schedules; Night Differentials (FWS) Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 CFR 532.403, New Appointments (FWS) Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 CFR 531.212, Superior Qualifications and Special Needs Pay-Setting Authority (GS) Exit Disclaimer: You Are Leaving www.ihs.gov 
• HHS Instruction 531-1, Setting Pay Based on Superior Qualifications or Special Need  (GS) [PDF - 322 KB]
• HHS Instruction 532-1, Pay Setting for the Federal Wage System  (FWS) [PDF - 381 KB]

OPM Guidance

• Fact Sheet - Superior Qualifications and Special Needs Pay Setting Authority Exit Disclaimer: You Are Leaving www.ihs.gov 

Case Preparation Information

• IHS Superior Qualifications and Special Needs PaySetting Authority Form [PDF - 195 KB]
• IHS Federal Wage System Appointments Above the Minimum Rate Form [PDF - 334 KB]
• OHR Salary Survey Intranet Site Exit Disclaimer: You Are Leaving www.ihs.gov 
• Cost of Living Comparisons Exit Disclaimer: You Are Leaving www.ihs.gov 

Within-grade increases (WGIs) or step increases are periodic increases in a General Schedule employee's rate of basic pay from one step of the grade to the next higher step of that grade. Employees must meet specific time-in-grade and performance requirements to be eligible.

Laws, Regulations, and HHS Instruction

• 5 U.S.C. 5335, Periodic Step Increases Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 U.S.C. 5336, Additional Step Increase Exit Disclaimer: You Are Leaving www.ihs.gov 
• 5 CFR 531 subpart D, Within - Grade Increases Exit Disclaimer: You Are Leaving www.ihs.gov 
• HHS Instruction 531-4, Within Grade and Quality Step Increases Exit Disclaimer: You Are Leaving www.ihs.gov  [PDF]

OPM Guidance

• Fact Sheet - Within-Grade Increases Exit Disclaimer: You Are Leaving www.ihs.gov 
• Q & A on Within-Grade Increases Exit Disclaimer: You Are Leaving www.ihs.gov