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Bi-Weekly and Annual Pay Caps on Premium Pay

  • General Schedule (GS) and other covered employees cannot normally earn more in a regular bi-weekly pay period than the amount that a GS-15, step 10 or level V of the Executive Schedule would earn in a bi-weekly pay period. Employees may receive certain types of “extra”, premium or overtime pay only to the extent that the greater of these two caps is not exceeded. (See 5 U.S.C. 5547(a) and 5 CFR 550.105)
  • 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 provided in law and regulation. (See 5 U.S.C. 5547(b) and 5 CFR 550.106-550.107.) This adjustment in the pay cap changes the calculation methodology so that employees may not exceed the annual rate of pay (rather than the bi-weekly) of either the GS-15 step 10 or the rate for level V of the Executive Schedule. The approval authority required to change the biweekly pay cap in an emergency depends on the nature of the emergency and is delegated to the Commandant, Secretary of Department of Homeland Security (DHS), or the Office of Personnel Management (OPM).
  • The biweekly pay limitation in 5 U.S.C. 5547 is also a ceiling on compensatory time off. Compensatory time off is merely an alternative form of payment for overtime work. As such, the value of an hour of compensatory time off is equal to the overtime hourly rate that is payable in dollars. Thus, the number of hours for which employees may receive monetary overtime pay is also the number of hours of compensatory time off that may be credited in a pay period. Employees may not exceed the biweekly pay limitation by choosing compensatory time off as a substitute for monetary overtime pay.
  • Employees at the GS-15, step 10 are unable to earn overtime pay or compensatory time for work performed even if the bi-weekly pay cap is lifted.