Section 1 Short title
This Act may be cited as the “Federal Employee Pay Compression Relief Act of 2023”.
Federal Employee Pay Compression Relief Act of 2023
A BILL
To remove cost-of-living adjustments and locality adjustment payments from the calculation of certain limits on the pay of Federal employees, and for other purposes.
Sec. 2 Federal employee COLA and locality adjustment pay cap removal
Title 5— Title 5, United States Code, is amended—
in section 5303, by amending subsection (f) to read as follows:
“(f) Adjustments to the basic pay of an employee or for a position under this section shall be disregarded when determining if the pay of such employee or for such position exceeds a limit established under this title on the total or maximum of such pay.”
in section 5304—
by striking subsection (g); and
by redesignating subsections (h) and (i) as subsections (g) and (h), respectively;
in section 5305(g)—
by striking paragraph (2);
by striking “(1) The benefit” and inserting “The benefit”; and
by striking “paragraph (2) and”;
in section 5306, by striking subsection (e);
in section 5307(a)(2)—
in subparagraph (B), by striking “; or” and inserting a semicolon;
in subparagraph (C), by striking the period at the end and inserting “; or” ; and
by adding at the end the following new subparagraph:
“(D) section 5304.”
in section 5372(b)(4)—
by striking “Subject to paragraph (1)” and inserting “(A) Subject to paragraph (1) and except as provided by subparagraph (B)”; and
by adding at the end the following new subparagraph:
“(B) For the purposes of determining whether the rate of basic pay for an administrative law judge meets the maximum rate of basic pay payable under paragraph (1), any adjustments under subparagraph (A) and any locality-based comparability payment under section 5304 or similar payment shall be excluded from the rate of basic pay of the administrative law judge.”
in section 5373—
in subsection (b), by striking “(including any portion of such pay attributable to comparability with private-sector pay in a locality)”; and
by adding at the end the following new subsection:
“(c) Any annual pay adjustment under section 5303 or similar adjustment and any locality-based comparability payment under section 5304 or similar payment shall be excluded from—
“(1) the annual rate of basic pay for a position or employee for the purposes of subsection (a); and
“(2) the pay of a civilian employee paid from nonappropriated funds for the purposes of subsection (b).”
in section 5376(b)—
in paragraph (1)—
in subparagraph (B), by inserting after “Executive Schedule” the following: “, except that for the purpose of applying such limitation, the rate of basic pay for a position to which this section applies does not include any adjustments under paragraph (2) or any locality-based comparability payment under section 5304 or similar payment”; and
by striking “5306(e) or”; and
in paragraph (2), by striking “Subject to paragraph (1), effective” and inserting “Effective”;
in section 5377(d)(2) is amended—
by striking “Basic pay” and inserting “(A) Basic pay”; and
by adding at the end the following new subparagraph:
“(B) For the purposes of subparagraph (A), the rate of basic pay fixed under this section shall exclude any annual pay adjustment under section 5303 or similar adjustment and any locality-based comparability payment under section 5304 or similar payment, including any changes in the basic rate of pay for a position made under the authority of this section to account for such an adjustment or payment that would have applied to such position if this section had never been enacted.”
in section 5382—
in subsection (a), by striking “5306(e) or”; and
by adding at the end the following new subsection:
“(d) For the purposes of determining the highest rate of basic pay payable for a position under this section, the rate of basic pay for such position shall exclude the percentage of the pay of such position that is equal to the percentage by which the pay of such position would increase if, without regard to any limitation on the maximum rate of basic pay for such position, such position was eligible for a locality-based comparability payment under section 5304 in the same manner as a position under the General Schedule that is in the same locality and eligible for such a payment.”
Military personnel— Section 203(a) of title 37, United States Code, is amended by adding at the end the following new paragraph:
“(3) For the purposes of determining the highest rate of basic pay payable for an officer or enlisted member under paragraph (2), the rate of basic pay for such officer or enlisted member shall exclude—
“(A) any annual pay adjustment under section 1009 or similar adjustment; and
“(B) any locality-based comparability payment under section 5304 of title 5 or similar payment.”
Other pay authorities—
In general— Except as otherwise provided in paragraph (2) and notwithstanding any other provision of law, when determining if the pay of the employee meets a Federal pay limit, the following shall be disregarded:
Any portion of the basic pay of the employee that is attributable to an annual pay adjustment under section 5303 of title 5, United States Code, or a similar adjustment.
Any portion of the basic pay of the employee that is attributable to a locality-based comparability payment under section 5304 of title 5, United States Code, or a similar payment.
Exceptions— Paragraph (1) does not apply with respect to a Federal pay limit to the extent otherwise provided in—
this Act;
the amendments made by this Act; or
a law that excludes the applicability of paragraph (1) with respect to such Federal pay limit by specific reference to this subsection.
Definitions— In this subsection:
Employee— The term employee means an individual holding an appointive position in the executive branch, other than a position in a uniformed service (as such term is defined in section 2101 of title 5, United States Code).
Federal pay limit— The term Federal pay limit means a limit on the maximum or total pay payable to an employee that is—
determined based on—
a rate of pay, including a maximum rate of pay, or pay scale established by or under title 5, United States Code; or
the rate of pay established under section 104 of title 3, United States Code; and
established by or pursuant to a law or regulation.
Pay— The term pay means amounts paid by the Federal Government to an employee as compensation for services performed as an employee.
Conforming amendments—
Section 733(a)(3)(A) of title 31, United States Code, is amended by inserting after “of title 5” the following: “, except that for the purpose of applying such limitation on the maximum rate, subsection (d) of such section does not apply”;
Section 3(b) of title 35, United States Code, is amended—
in paragraph (2)(B), by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of title 5”; and
in paragraph (6), by striking “section 5306(e) or”.
Section 14306(a)(2) of title 40, United States Code, is amended by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of title 5)”.
Section 15301(d)(1) of title 40, United States Code, is amended by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of that title”.
Section 382B(h)(5)(A)(ii) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009aa–1(h)(5)(A)(ii)) is amended by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of that title”.
Section 383A(h)(5)(A)(ii) of the Consolidated Farm and Rural Development Act (7 U.S.C. 2009bb–1(h)(5)(A)(ii)) is amended by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of that title”.
Section 141 of the Higher Education Act of 1965 (20 U.S.C. 1018) is amended—
in subsection (d)(5)(A), by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(B) of such title”; and
in subsection (e)(3)—
in subparagraph (A), by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of such title”; and
in subparagraph (B), by striking “, including any applicable locality-based comparability payment,”.
Section 436(b) of the Energy Independence and Security Act of 2007 (42 U.S.C. 17092(b)) is amended by striking “, including any applicable locality-based comparability payment that may be authorized under section 5304(h)(2)(C) of that title”.
Annuity shortfalls— The Secretary of the Treasury shall pay from the General Fund of the Treasury into the Civil Service Retirement and Disability Fund established under section 8348 of title 5, United States Code, the amount determined by the Director of the Office of Personnel Management to be necessary to reimburse the Fund for any estimated increase resulting from this Act or the amendments made by this Act in—
the unfunded liability of the Civil Service Retirement and Disability Fund (as defined in section 8331 of title 5, United States Code); and
the supplemental liability of such Fund (as defined in section 8401 of title 5, United States Code).