The federal biweekly pay cap limits how much premium pay (like overtime, night differential, or Sunday pay) a General Schedule (GS) employee can earn in a single pay period. Under 5 U.S.C. 5547, an employee’s combined basic pay and premium pay cannot exceed the biweekly rate of either GS-15, step 10 (including locality pay) or Level V of the Executive Schedule, whichever is greater. (See 5 U.S.C. 5547(a) and 5 CFR 550.105).
- What it restricts: It specifically caps premium pay. An employee’s standard base salary will always be paid in full, even if it causes the employee to reach the maximum limit.
- How it’s calculated: The exact dollar amount varies depending on your specific locality. In the U.S., the adjusted GS-15, step 10 rate is almost always higher than Level V of the Executive Schedule, so it serves as the operative cap.
- What happens if you hit the cap: Once you reach the biweekly limit, you cannot receive any further premium pay or earn compensatory time off for that specific pay period. In certain situations, an agency can adjust or lift the biweekly limitation.
Exceptions and Waivers
Under 5 U.S.C. 5547, agencies have the authority to waive the biweekly limitation. This generally happens when an employee is performing work critical to the agency's mission or directly involved in an emergency involving a direct threat to life or property. If the cap is waived, the limit is applied on an annual basis instead of biweekly.
- The Annual Cap Alternative: 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 550.106-107.) 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).
- Waiver Implementation: When a waiver is applied, an employee can legally exceed the biweekly limit during emergencies, but their total earnings for the calendar year will be limited by an annualized cap (calculated by multiplying the biweekly cap by the number of pay periods in the year).
- Requesting a Waiver: Civilian Resource Coordinators should route requests through FedHR to the Office of Resource Management (CG-83) with a copy to the servicing HR Specialist. The request (memo) must contain the following info:
- Background for the incident that generated the request, i.e., what happened, where, when, how, what was the U.S. Coast Guard response, etc.
- Employees name, title, series, grade, and FLSA designation.
- A specific description with duties performed by the employee and how the work aligns with a Coast Guard critical mission.
- The pay period(s) and date the work began and the pay period(s) and date that the work was completed.
- Copies of LES for every pay period(s) for which the biweekly pay cap was exceeded. The LES provides info such as: the number of hours worked, the number of hours paid, the number of hours unpaid, the amount paid, and the amount unpaid because of the cap.
Deferment
Under DHS policy, Coast Guard will defer the payment of premium pay that exceeds the biweekly cap until the end of the calendar year.
Note: The biweekly pay limitation in 5 U.S.C. 5547 is also a ceiling on compensatory time off. Compensatory time off is deemed to be 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 an employee may receive monetary overtime pay is also the number of hours of compensatory time off that may be credited in a pay period. An employee may not exceed the biweekly pay limitation by choosing compensatory time off as a substitute for monetary overtime pay.