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This report includes a summary of key changes, including the salary level test and salary basis test.

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June 14, 2011
Bonuses for Senior-Level Federal Workers Capped

FederalNewsRadio.com is reporting that the Obama administration has limited the amount federal agencies can spend on performance awards by instructing agencies that they can spend no more than 5 percent of aggregate salaries for individual awards for senior-level employees.

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The information was included in a memo issued on June 10 by the director of the Office of Personnel Management and the chief performance officer of the Office of Management and Budget.

The memo states: “federal agencies are authorized to grant awards to their employees to recognize and reward excellence in performance. Given the current fiscal environment, and the budget constraints agencies will operate under for the remainder of fiscal year 2011, as well as those reflected in the President’s fiscal year 2012 budget proposal, these awards must be carefully considered. It is critical that these awards be managed in a manner that is cost-effective for agencies and successfully motivates strong employee performance.

“When the president made the decision to propose a 2-year pay freeze beginning in January 2011, he directed the Office of Personnel Management (OPM) and the Office of Management and Budget (OMB) to evaluate the system of performance awards and incentives for cost and effectiveness.”

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