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Why Congress Needs to Lift the Pay Cap on Administrative Law Judges

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One thing both political parties agree upon is the need for qualified people to handle our nation’s most important duties. Public service has always been just that: a service. No one joins the federal government hoping to get rich; they join because they choose to participate actively in our democracy.

For those of us honored to serve as United States Administrative Law Judges, we do so because we believe that offering our citizens due process is the highest calling of our profession. We are responsible for deciding matters involving hundreds of millions of dollars of taxpayer funding, affecting thousands of American corporations and their employees, and impacting our nation’s economy in ways small and large. We are proud to be a part of the world’s most respected judiciary, but we are also very concerned about its future. Recent economic pressures on salaries are having a negative impact in recruitment of highly qualified attorneys for merit appointment to these vital judicial roles.

USALJs are subject to a pay cap that, until recently, was not a significant problem. However, after years of salary stagnation that has failed to keep pace with inflation, we believe Congressional action adjusting the USALJ pay cap is necessary for two important reasons: First, the loss of historical pay parity between USALJs and senior governmental attorneys is making our judicial positions less attractive for qualified candidates. Second, pay compression within the USALJ ranks is promising to decimate our ranks as existing judges seek employment in the much more lucrative private sector. To resolve both problems, legislation is needed to eliminate or adjust the limit on USALJ pay from Executive Level III set in 1993 to Level II. This modest adjustment would help agencies recruit the best qualified attorneys to serve the American public as USALJs, and retain the most experienced judges.

By way of background, Congress enacted the Administrative Procedure Act in 1946 to provide a bill of rights for millions of Americans whose affairs are regulated by federal executive departments and agencies. The APA created the United States Administrative Law Judge position to conduct formal adjudicative proceedings as required by various statutes that federal executive departments and agencies enforce. USALJs are triers of fact and are guaranteed decisional independence to ensure due process. By statute, USALJs may be discharged only for good cause and they must be free from supervision or direction by executive branch agents engaged in investigative or prosecutorial functions. Ex parte communications, performance ratings, and bonuses are forbidden. The Supreme Court has found USALJs to be functionally comparable to United States district court trial judges.

The Office of Personnel Management has oversight responsibility for USALJ appointment and pay. Each department or agency appoints USALJs as necessary for formal adjudications after comprehensive testing and examination by OPM. Recently, OPM updated a rigorous examination process to screen, qualify, and select experienced attorney-applicants for placement on a register of those eligible for appointment by executive branch departments or agencies having a need for USALJs. For decades, however, nothing has been done about the USALJ locality pay cap and the erosion and compression of USALJ pay.

The Level III cap froze USALJ salaries well below those of senior attorneys with responsibilities often far less impactful than USALJs. Many well-qualified attorneys who would otherwise compete for these judicial positions instead pursue Senior Executive Service, Senior Level, or Scientific and Professional positions, or senior positions in private practice, all of which offer much more competitive pay and opportunity for advancement.

The Level III cap has also eliminated historical pay parity that USALJs had with other Article I judges who serve as federal bankruptcy judges and magistrate judges. Like Article III trial judges, Article I federal bankruptcy and magistrate judges recently received a 25 percent pay increase. The elimination of parity means that individuals who might have previously sought a USALJ position, now seek appointment as magistrate and bankruptcy judges. In short, USALJ positions are no longer financially competitive.

Further, to adjust for the cost of living in higher priced areas of the country, USALJs are entitled to receive locality payments under 5 U.S.C. § 5304. Since 1993, the existing pay cap has operated to compress and gradually eliminate locality pay for experienced judges. Adjusting the pay cap from Level III to Level II would help relieve this barrier to Congress’s intended salary structure and keep our experienced judges from leaving for financial reasons.

Finally, even supervisory positions within the USALJ structure have been negatively impacted. It is not unusual for the Chief ALJ at an agency to make the exact same salary as his or her subordinates, despite the more demanding workload and additional responsibilities required of the Chief ALJ position. Reducing or eliminating pay compression is essential to ensure the best qualified judges are retained and incentivized to become supervisory judges.

In short, legislation is long overdue to adjust the limit on USALJ pay to Executive Level II, bringing USALJs in line with attorneys at the SES, SL, and ST positions, and our colleagues in other Article I judicial positions. Eliminating or adjusting the limit supports the intent of law and restores the historical pay parity between USALJs and senior attorneys, bankruptcy judges and magistrate judges. Most importantly, it helps agencies recruit and retain the most qualified attorneys to serve as USALJs to ensure the quality of due process remains the finest in the world.

The Hon. Erin Masson Wirth is president of the Federal Administrative Law Judges Conference.

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