Memorandum for the Heads of Executive Departments and Agencies

This memorandum directs executive department and agency heads to freeze federal employee pay schedules and rates that are set by administrative discretion for calendar years 2011-2012, supplementing a statutory pay freeze enacted by Congress. The freeze covers discretionary pay system adjustments, general increases including locality pay, and requires proportional reductions in performance-based increases.

Federal Register Open PDF 75 FR 81829

Impact dates

Date TBD
OPM guidance to be issued
Dec 31, 2012
Pay freeze ends
Jan 1, 2011
Pay freeze takes effect

Key directives

Suspend any increases to pay systems or schedules via administrative discretion January 1, 2011 – December 31, 2012
Forgo general increases including locality pay via administrative discretion during same period
Reduce performance-based increase funds proportionally to reflect base pay freeze
OPM to issue implementation guidance and publish memorandum in Federal Register

Who is ordered

Timeline

Immediate

Memorandum issued December 22, 2010
OPM directed to issue guidance and publish in Federal Register

Near term (90d)

Pay freeze takes effect January 1, 2011
OPM guidance expected

Long term

Freeze continues through December 31, 2012
Potential lasting effects on federal compensation structures and morale

Risks & tensions

Potential recruitment/retention challenges for federal workforce during two-year freeze
Tension between fiscal austerity and federal employee morale
'To the extent permitted by law' qualifier creates some implementation uncertainty