The Office of Personnel Management is ramping up preparations for civilian federal employees’ anticipated pay raise next year.

OPM launched its review of special pay rates for certain federal positions. It’s an annual process where agencies can provide, if necessary, review materials on any positions for which they would like to issue a pay rate other than the standard General Schedule rate.

“I have determined that the default January 2023 adjustment for special rates will be 4.1 percent,” OPM Director Kiran Ahuja wrote in an Oct. 19 announcement.

That percentage aligns with President Joe Biden’s formal announcement on Aug. 31 of his plans to give civilian federal employees a 4.1% base pay increase, plus an average locality pay boost of 0.5%, creating an overall increase of 4.6% for 2023.

Agencies can recommend positions to receive a special pay rate outside of the likely, but not yet official, across-the-board pay raise for GS employees.

Special pay rates are adjusted by either a set dollar value or a percentage of an employees’ base pay. OPM also periodically reviews special rates to see if they should be terminated, reduced or increased based on recent staffing considerations. Agencies looking to request a special rate adjustment above the 2023 GS base pay level should submit additional staffing data to OPM. Those requesting special rate adjustments below the standard base pay should send OPM a written justification and any supporting data.

Historically, OPM authorizes higher pay rates for specific occupations, grades and locations to help mitigate particularly acute recruitment and retention difficulties.

“All requests for special rate adjustments greater than the January 2023 GS base pay adjustment must address the existing or likely significant recruitment or retention difficulties justifying the proposed increase,” Ahuja wrote.

Some occupations, like cyber-related positions, have faced long-standing staff shortages in the federal workforce. A group of agencies just last week proposed a new pay model for federal IT managers by submitting a Special Salary Rate proposal to OPM. OPM also provides an index of federal positions with special rates, including a wide range of jobs, from park rangers, to law enforcement officers, to firefighters and more.

When making special pay rate recommendations, agencies should consider alternative options, like the ability to provide other types of pay and leave flexibilities to address recruitment and retention challenges, Ahuja said. Those include things like relocation incentives and student loan repayments.

If agencies don’t plan to recommend special pay rates for any employees, they don’t need to send anything to OPM, and they’ll receive the standard pay adjustment for all GS employees.

Agencies must submit all their review and recommendation materials by Nov. 18 for adjustments they would like to take effect starting in January.

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