The President has signed an Executive order to implement the January 2023 pay adjustments. Image: William Sawalich/Shutterstock.com
Following is OPM’s memo on carrying out the 2023 federal employee raise, specifying how the increase affects different categories of employees.
The President has signed an Executive order to implement the January 2023 pay adjustments. (See Attachment 1.) Pursuant to the President’s alternative plan issued under 5 U.S.C. 5303(b) and 5304a on August 31, 2022, the Executive order authorizes a 4.1 percent across-the-board increase for statutory pay systems and locality pay increases costing approximately 0.5 percent of basic payroll, reflecting an overall average pay increase of 4.6 percent. This memorandum reviews relevant portions of the Executive order.
The pay adjustment guidance in this memorandum does not apply to senior political officials that have been covered by a pay freeze. We will issue separate guidance regarding whether this pay freeze will be continued or terminated.
New 2023 Salary Tables and Effective Date
We have posted the 2023 salary tables effective the first day on OPM’s website. The 2023 pay schedules are of the first applicable pay period beginning on or after January 1, 2023 (January 1, 2023, based on the standard biweekly payroll cycle).
The General Schedule and Other Statutory Pay Systems
The Executive order provides an across-the-board increase of 4.1 percent in the rates of basic pay for the statutory pay systems––the General Schedule (GS), the Foreign Service schedule, and certain schedules for the Veterans Health Administration of the U.S. Department of Veterans Affairs. Special base rates for law enforcement officers at GS grades 3 through 10 are also increased by 4.1 percent. (These law enforcement officers are assigned the “GL” pay plan code.)
Executive Schedule
Under 5 U.S.C. 5318, the official Executive Schedule (EX) rates of pay are increased by 4.1 percent (rounded to the nearest $100). The official EX salary table is available on OPM’s website. The official EX rates of pay are used in establishing pay limitations for employees and pay systems unaffected by any pay freeze for certain senior political officials.
Senior Executive Service
Under 5 U.S.C. 5382, the minimum rate of basic pay for the Senior Executive Service (SES) rate range is adjusted to be consistent with the increase in the minimum rate of basic pay for senior-level positions under 5 U.S.C. 5376 ($141,022 in 2023). The applicable maximum rate of basic pay for the SES is $212,100 (EX-II) for SES members covered by an SES performance appraisal system certified pursuant to 5 U.S.C. 5307(d) and $195,000 (EX-III) for SES members covered by an SES performance appraisal system that has not been certified. An SES member with a pay rate below the minimum rate of the new SES rate range must receive a pay increase effective January 1, 2023, that brings the SES member’s rate to at least the new minimum rate because an SES member may not receive less than the minimum rate of the SES rate range.
Other SES pay adjustments must generally be made based on individual performance, contribution to the agency’s performance, or both, as determined under a rigorous performance management system, pursuant to 5 U.S.C. 5382. An agency’s determination to adjust the rate of basic pay for an SES member that is approved by the end of the first pay period in January 2023 (January 14, 2023) may be made effective as of the first day of that first pay period (January 1, 2023). Determinations to adjust SES pay that are approved after January 14, 2023, will become effective at the beginning of the next pay period following the approval. OPM’s regulations for setting and adjusting SES pay are available at 5 CFR part 534, subpart D.
Senior-Level and Scientific and Professional Positions
The minimum rate of basic pay for the senior-level (SL) and scientific and professional (ST) rate range is increased by 4.1 percent, which is the amount of the base GS increase, and is $141,022 in 2023. An SL or ST employee with a pay rate below the minimum rate of the new SL/ST rate range must receive a pay increase effective January 1, 2023, that brings the employee’s rate to at least the new minimum rate because an SL or ST employee may not receive less than the minimum rate of the SL/ST rate range. The applicable maximum rate of basic pay is $212,100 (EX-II) for SL or ST employees covered by a certified SL/ST performance appraisal system and $195,000 (EX-III) for SL or ST employees covered by an SL/ST performance appraisal system that has not been certified.
As provided in 5 U.S.C. 5376(b)(2) and 5 CFR 534.507(a)(1), effective at the beginning of the first applicable pay period commencing on or after the first day of the month in which an adjustment takes effect under 5 U.S.C. 5303 in the rates of basic pay under the General Schedule, the head of an agency must adjust an SL/ST employee’s rate of basic pay by an amount the agency head considers appropriate (including a zero adjustment), subject to the regulations in 5 CFR 534.507, and the agency’s written procedures. Therefore, each agency must make an appropriate adjustment in each SL/ST employee’s rate of basic pay because the General Schedule is being adjusted the first day of the first pay period beginning on or after January 1, 2023. The adjustment of an SL/ST employee’s pay rate under 5 CFR 534.507(a)(1) must be made effective on the first day of the first pay period beginning on or after January 1, 2023 (January 1, 2023, based on the standard biweekly payroll cycle). An agency’s determination to adjust the rate of basic pay for an SL or ST employee that is approved by the end of the first pay period in January 2023 (January 14, 2023) may be made effective as of the first day of that first pay period (January 1, 2023). Determinations to adjust SL/ST pay that are approved after January 14, 2023, will become effective at the beginning of the next pay period following the approval. OPM’s regulations for setting and adjusting SL/ST pay are available at 5 CFR part 534, subpart E.
Post-Employment Restrictions
Agencies are required to notify SES members, SL and ST employees, and other individuals who are paid at a rate of basic pay equal to or greater than 86.5 percent of the rate for EX-II ($212,100 x 86.5 percent = $183,467 in 2023) that they are subject to certain post-employment restrictions in 18 U.S.C. 207(c)(2)(A)(ii). OPM’s regulations requiring notification of post-employment restrictions are available at 5 CFR part 730. Agencies may continue to use the sample notice OPM provided in its memorandum of January 6, 2004 (CPM 2004-01), to notify SES members, SL or ST employees, or other individuals that they are subject to the post-employment restrictions in 18 U.S.C. 207(c). (Agencies will need to update the pay system, salary threshold, and effective date, as appropriate.) View the sample notice.
Aggregate Limitation on Pay
The aggregate limitation on pay for calendar year 2023 is $235,600 (equivalent to the rate for EX-I). SES members and employees in SL/ST positions who are covered by a certified performance appraisal system are subject to a higher aggregate limitation on pay of the Vice President’s salary ($272,100 in 2023). (See 5 U.S.C. 5307 and 5 CFR part 530, subpart B.)
Administrative Law Judges
The Executive order reflects a decision by the President to increase the rates of basic pay for administrative law judges (ALJs) by 4.1 percent, rounded to the nearest $100. The rate of basic pay for AL-1 is $183,500 (equivalent to the rate for EX-IV). The rate of basic pay for AL-2 is $178,900. The rates of basic pay for AL-3/A through 3/F range from $122,400 to $169,600. The new ALJ salary table is available on OPM’s website.
Administrative Appeals Judges
Under 5 U.S.C. 5372b, the rates of basic pay for administrative appeals judge (AAJ) positions must be set at a rate not less than the minimum rate of basic pay for level AL-3 and not more than the maximum rate of basic pay for level AL-3 of the ALJ pay system established under 5 U.S.C. 5372. At 5 CFR 534.603, OPM’s regulations link the structure of the AAJ pay system directly to the structure for level AL-3 of the ALJ pay system. The AAJ pay system includes six rates of basic pay—AA-1, 2, 3, 4, 5, and 6. These rates correspond to the rates of basic pay for AL-3/A, B, C, D, E, and F of the ALJ pay system. The new AAJ salary table is available on OPM’s website.
Locality Pay Areas
On December 5, 2022, OPM published a final rule in the Federal Register on behalf of the President’s Pay Agent making changes to the definitions of two locality pay areas. The final regulations include Carroll County, IL, in the Davenport-Moline, IA-IL locality pay area, and Brooks County, TX, in the Corpus Christi-Kingsville-Alice, TX, locality pay area, as areas of application. The definition changes and any pay adjustments resulting from the definition changes are applicable the first day of the first applicable pay period beginning on or after January 4, 2023 (January 15, 2023, based on the standard biweekly pay period cycle). The final rule is available on the Federal Register’s website. Locality pay area definitions are available on OPM’s website.
Locality Payments
The President’s Executive order reflects the amounts of the new locality payments for GS employees. Attachment 2 provides a table showing the 2023 locality pay percentage and total percentage increase in each locality pay area (reflecting the combined effect of the 4.1 percent across-the-board increase and the applicable increase in the locality pay percentage). Attachment 3 provides a chart showing an example of how the 2023 locality rate and total increase are computed for an employee in the Rest of U.S. locality pay area. GS locality rates are limited to the rate for EX-IV. (See 5 U.S.C. 5304(g)(1) and the “Executive Schedule” section, above.) The 2023 locality pay tables for the General Schedule are available on OPM’s website.
Locality Pay Extensions
On November 30, 2022, OPM issued a memorandum on behalf of the President’s Pay Agent (the Secretary of Labor and the Directors of the U.S. Office of Management and Budget and OPM) that continues GS locality payments for ALJs and certain other non-GS employee categories in 2023. The memo is available on OPM’s website.
Cost-of-Living Allowance Rates for Nonforeign Areas
As provided under the Nonforeign Area Retirement Equity Assurance Act of 2009 (subtitle B of title XIX of the National Defense Authorization Act for Fiscal Year 2010 (Public Law 111-84, October 28, 2009)), employees in nonforeign areas entitled to cost-of-living allowances (COLAs) have corresponding reductions in their COLAs when locality rates increase. The locality and COLA rates in each COLA area are available at https://www.opm.gov/policy-data-oversight/pay-leave/pay-systems/nonforeign-areas/.
Special Rates
We are issuing a separate memorandum announcing the results of OPM’s annual review of special rates and the 2023 special rate adjustments.
Prevailing Rate Pay Adjustments
We are issuing a separate memorandum on pay adjustments for certain prevailing rate (wage) employees.
2023 Premium Pay Caps
Under 5 U.S.C. 5547(a) and 5 CFR 550.105, GS and other covered employees may receive certain types of premium pay in a biweekly pay period only to the extent that the sum of basic pay and such premium pay for the pay period does not exceed the greater of the biweekly rate payable for (1) GS-15, step 10 (including any applicable locality payment or special rate supplement), or (2) the rate payable for EX-V ($172,100 in 2023). In certain emergency or mission-critical situations, an agency may apply an annual premium pay cap instead of a biweekly premium pay cap, subject to the conditions prescribed in law and regulation. (See 5 U.S.C. 5547(b) and 5 CFR 550.106–550.107.) We have posted the 2023 biweekly premium pay caps fact sheet on OPM’s website.
Adjusting Retained Rates
Certain employees are entitled to retained rates above the applicable rate range under 5 U.S.C. 5363 and 5 CFR part 536. As provided in 5 U.S.C. 5363(b)(2)(B) and 5 CFR 536.305, when the maximum rate of the highest applicable rate range for an employee’s position of record is increased while the employee is receiving a retained rate, the employee is entitled to 50 percent of the amount of the increase in that maximum rate. An example of adjusting a retained rate can be found in the fact sheet on OPM’s website.
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See also,
The Process of Retiring: Last-Minute Changes
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