Union: Rank-and-File Employees Deserve Bigger Bonuses Next Year, Too

The administration’s decision to lift the performance award cap on senior executives should be applied to everyone in the workforce, federal advocates say.

A federal employee union says lifting the bonus cap for senior executives across government in fiscal 2017 without doing the same for other employees will lead to “significant morale issues” at agencies.

The National Treasury Employees Union has asked the Obama administration, which is raising the aggregate spending cap on agency performance awards for those in the Senior Executive Service as well as other senior-level career positions from 4.8 percent to 7.5 percent beginning Oct. 1, to unfreeze a similar restriction on bonuses for the rest of the federal workforce.

Right now, performance awards and individual contribution awards for non-senior-level employees are limited to no more than 1 percent of their aggregate salaries. That 1 percent cap, along with the current 4.8 percent cap on SES/SL/ST bonuses, has been in place since fiscal 2011.

Not lifting the cap for everyone “would be both unfair, and misguided,” NTEU National President Anthony Reardon wrote in an Aug. 17 letter to Office of Management and Budget Director Shaun Donovan and Office of Personnel Management acting Director Beth Cobert. Reardon said the union wants “to be assured that all federal employees—not just less than 1 percent of the federal workforce and only its highest paid employees—will be covered by this new policy on awards for fiscal year 2017.”

An OPM spokeswoman said “a decision has not been made” yet on whether to increase the cap on performance awards for non-senior-level employees. OMB did not immediately respond to questions on the matter.

OMB and OPM sent guidance to agencies on Aug. 12, reminding them that they can reward top senior executives with more bonus money in fiscal 2017 for work performed in fiscal 2016. The bonus cap increase, which takes effect on Oct. 1, is part of President Obama’s December 2015 executive order aimed at streamlining SES hiring, improving the corps’ development and making adjustments to pay to help recruit and retain talented leaders.

Donovan and Cobert said in that memo that agencies should make meaningful distinctions among senior employees when it comes to handing out performance bonuses, “providing substantial monetary awards for the very best SES and SL/ST performers and allowing more variance of award amounts among rating levels, which is a common attribute of pay-for-performance systems.”  SL refers to Senior Level employees, while ST applies to Senior Professional and Scientific employees.

The Aug. 12 memo said that the administration would issue guidance to agencies separately on performance awards for non-SES/SL/ST employees. That guidance is “still moving through the clearance process at OPM, and unfortunately, I don’t have a specific date,” the OPM spokeswoman said.

Reardon said the three-year pay freeze on federal workers from 2010 through 2013, “followed by approximately a 3.3 percent cumulative pay increase over the last three years,” isn’t enough to help feds keep pace with the rate of inflation over that period of time.

“Many bargaining unit federal employees that NTEU represents are finding it harder and harder to simply ‘keep up’ and to pay for increased food and utility costs, as well as college tuition and health insurance premiums,” Reardon wrote. “After bearing the financial sacrifice they were asked to make during a time of great economic difficulty in our country, these workers have now witnessed a rebound in private sector wages, along with an improved job market that has required employers to offer significant recruitment and retention incentives.”

Based on some of the comments in response to an Aug. 16 story announcing the administration’s guidance on senior executive performance awards in fiscal 2017, non-senior-level employees aren’t too thrilled about the change.

One reader asked: “Congress demands better control on bonuses and that only the best should receive them and OPM opens the floodgates. Are they that tone deaf??”

And another shared this more pointed opinion: “I feel like these GovExec stories are put up to purposefully incite comment rage amongst the Proles. Are we being trolled? No one's reaction on here, or in actual govt work, is ‘Gee, good thing those SES's are getting well compensated.’ Because we all know come bonus time, even with some outstanding ratings, you're lucky to receive $250 or an 8-hr time off award.”

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