Homeland Security Department Proposals: Scope of Personnel Flexibilities

Homeland Security Department Proposals: Scope of Personnel Flexibilities

Order Code RL31548
Report for Congress
Received through the CRS Web
Homeland Security Department Proposals:
Scope of Personnel Flexibilities
August 30, 2002
name redacted
Legislative Attorney
American Law Division
Congressional Research Service ˜ The Library of Congress

Homeland Security Department Proposals: Scope of
Personnel Flexibilities
Summary
The proposal of President Bush to create a Department of Homeland Security
by transferring several existing agencies has generated controversy, among other
things, about the nature of the human resources management system for the
Department. The debate centers on the degree of flexibility that should be granted
to the new system to be able to respond to terrorist threats to the homeland.
H.R. 5005, the Department of Homeland Security Act, as passed by the House
on July 26, 2002, creates the Department as an executive agency within the meaning
of title 5 of the United States Code, which codifies laws relating to government
organization and employees. A provision of H.R. 5005, section 761, authorizes the
Secretary of Homeland Security, notwithstanding any other provision of title 5, in
regulations prescribed jointly with the Director of the Office of Personnel
Management, to establish, and from time to time adjust, a human resources
management system for some or all of the organizational units of the Department of
Homeland Security. The bill enumerates several chapters of title 5 that may not be
waived, but those relating to such matters as Performance Appraisal, Classification,
Pay Rates and Systems, Labor-Management and Employee Relations, Adverse
Actions, and Appeals are eligible for waiver or adjustment. Authority to establish
and adjust a system is scheduled to expire five years after enactment.
A substitute amendment to H.R. 5005, the National Homeland Security and
Combating Terrorism Act of 2002, was filed in the Senate on August 1, 2002, after
the Committee on Governmental Affairs agreed to language offered by Chairman
Joseph Lieberman. The Lieberman substitute provides that the transfer of an
employee to the Department of Homeland Security shall not alter the terms and
conditions of employment, including compensation, of any employee so transferred.
While the Lieberman substitute amendment does not authorize the Secretary to
adjust civil service laws only for the Department of Homeland Security, it contains
some provisions that amend civil service laws for the entire government in relation
to such matters as evaluating and appointing applicants for federal employment and
compensating some employees.
The Advisor to the President on Homeland Security has stated that he would
advise the President to veto the Lieberman substitute amendment in its current form
if it should be presented to the President for signature because, among other reasons,
it does not provide sufficient personnel flexibility with respect to appointing,
evaluating, transferring, compensating, and terminating employees that the President
believes the Secretary of Homeland Security needs to protect the homeland.
This report discusses human resources management issues addressed in H.R.
5005 as passed by the House and the Lieberman substitute amendment to H.R. 5005,
with emphasis on the provisions of current law that may be subject to adjustment by
the Secretary of Homeland Security.

Contents
House-Passed H.R. 5005, The Homeland Security Act . . . . . . . . . . . . . . . . . 1
Title 5 Chapters Eligible for Adjustment . . . . . . . . . . . . . . . . . . . . . . . . 4
House Debate: Waxman-Frost Amendment . . . . . . . . . . . . . . . . . . . . 23
Lieberman Substitute to H.R. 5005 in Senate . . . . . . . . . . . . . . . . . . . . . . . 25
Department of Homeland Security Provisions . . . . . . . . . . . . . . . . . . . 26
Governmentwide Federal Workforce Improvement Provisions . . . . . 27
Veto Recommendation to Personnel Provisions in
Lieberman Substitute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

Homeland Security Department: Scope of
Personnel Flexibilities
This report discusses civil service provisions in H.R. 5005, 107th Congress, 2d
Session, the Homeland Security Act, as passed by the House, and the substitute
amendment to H.R. 5005 offered by Senator Joseph Lieberman, the National
Homeland Security and Combating Terrorism Act of 2002, 107th Congress, 2d
Session, as agreed to by the Committee on Governmental Affairs.1 H.R. 5005
authorizes the Secretary of Homeland Security to adjust some provisions of title 5 of
the United States Code, the civil service laws, but not other provisions. The
Lieberman substitute proposes some amendments to civil service laws that would
apply to all government agencies. This report identifies civil service laws that may
not be adjusted and describes those that may be adjusted pursuant to H.R. 5005, as
well as proposals for amendments to civil service laws in the Lieberman substitute.2

House-Passed H.R. 5005, The Homeland Security Act
On July 26, 2002, the House by a vote of 295 to 132 passed H.R. 5005, a bill to
establish the Department of Homeland Security. 148 Cong. Rec. H5887-H5888 (daily
ed. July 26, 2002). Section 101 of the bill establishes the Department “as an executive
department of the United States within the meaning of title 5, United States Code.”
Title 5 codifies statutes that relate to government organization and employees.
Section 601 of H.R. 5005, as passed by the House, provides that the Secretary of
Homeland Security, acting through the Under Secretary for Management, shall be
responsible for the management and administration of the Department including,
among other things, human resources and personnel.
Section 761(a) of H.R. 5005 adds a new section 9701(a) to subpart I of part III
of title 5, which states that, “Notwithstanding any other provision of this title, the
Secretary of Homeland Security may, in regulations prescribed jointly with the
Director of the Office of Personnel Management establish, and from time to time
adjust, a human resources management system for some or all of the organizational
units of the Department of Homeland Security.”
1See (name redacted),
Homeland Security: Human Resources Management,
Congressional Research Service Report RL31500, for an overview of H.R. 5005 and S. 2452
as they relate to human resources management.
2The scope of this report is general civil service issues; it does not address collective
bargaining or whistleblower issues. See (name redacted),
Collective Bargaining and
Homeland Security, CRS Report RS31520, and (name redacted),
Whistleblower
Protection for Federal Employees, Congressional Research Service Report 97-787, for
discussions of these legal issues. CRS Report RL31513 provides a side-by-side comparison
of the H.R. 5005 and the Lieberman substitute.

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The new section 9701(b) provides that this system shall--
(1) be flexible;
(2) be contemporary;
(3) not waive, modify, or otherwise affect–
(A) the public employment principles of merit and fitness
set forth in section 2301, including the principles of hiring
based on merit, fair treatment without regard to political
affiliation or other non-merit considerations, equal pay for
equal work, and protection of employees against reprisal for
whistleblowing;
(B) any provision of section 2302, relating to prohibited
personnel practices;
(C) (i) any provision of law referred to in section
2302(b)(1); or
(ii) any provision of law implementing any
provision of law referred to in section
2302(b)(1) by–
(I) providing for equal
employment opportunity through
affirmative action; or
(II) providing any right or remedy
available to any employee or
applicant for employment in the
civil service;
(D) any other provision of this part [part III of title 5,
United States Code, beginning at chapter 21] as
described in subsection (c) [see p. 4 infra]; or
(E) any rule or regulation prescribed under any
provision of law referred to in any of the preceding
subparagraphs of this paragraph;
(4) ensure that employees may organize, bargain collectively, and
participate through labor organizations of their own choosing in
decisions which affect them, subject to any exclusion from
coverage or limitation on negotiability established by law; and
(5) permit the use of a category rating system for evaluating
applicants for positions in the competitive service.

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During floor debate on H.R. 5005, the House by a vote of 227 to 202 agreed to
an amendment offered by Representative Jack Quinn that addresses the need to ensure
the direct participation of employee representatives in planning, developing,
implementing, or adjusting a human resources management system.3 This
amendment, new title 5 section 9701(e) “Provisions to Ensure Collaboration with
Employee Representatives,” directs the Secretary of Homeland Security and the
Director of the Office of Personnel Management, with respect to any proposed system
or adjustment-- (1) to provide to each employee representative who represents any
employees who might be affected a written description of the proposed system,
including reasons why it is considered necessary; (2) give each representative at least
60 days (unless extraordinary circumstances require earlier action) to review and make
recommendations with respect to such proposal; and (3) give any such
recommendations full and fair consideration in deciding whether and how to proceed
with the proposal.
Before implementing any proposed system or adjustment, the Secretary and
Director must--(1) give each employee representative details of the decision to
implement the proposal, together with information on which the decision was based;
(2) give each representative an opportunity to make recommendations with respect to
the proposal; and (3) give such recommendations full and fair consideration, including
providing reasons to an employee representative if any of its recommendations are
rejected.
If a proposal for a system or adjustment is implemented, the Secretary and
Director must--(1) develop a method for each employee representative to participate
in further planning or development which might become necessary; and (2) give each
employee representative adequate access to information to make that participation
productive. Any procedures necessary to carry out subsection (e) shall include
measures to ensure--(1) in the case of employees in a bargaining unit which has been
accorded exclusive recognition, representation by individuals designated or from
among individuals nominated by such organization; (2) in the case of any employees
who are not within such a unit, representation by any appropriate organization which
represents a substantial percentage of those employees or, if none, in such other
manner as may be appropriate, consistent with the purposes of subsection (e); and (3)
the selection of representatives in a manner consistent with the relative numbers of
employees represented by the organizations or other representatives involved.
Another provision of H.R. 5005, subsection (e) “Employment Provisions” of
section 812 “Savings Provisions,” also addresses the kinds of regulations that the
Secretary of Homeland Security may prescribe. It authorizes the Secretary to “(1)
...adopt the rules, procedures, terms, and conditions, established by statute, rule, or
regulation before the effective date of this act, relating to employment in any agency
transferred to the Department pursuant to this act.” Section 812(e) also describes the
effect of a transfer on terms and conditions of employment: “...except as otherwise
provided in this act, or under authority granted by this act, the transfer pursuant to this
3See 147 Cong. Rec. H5809-5813 (daily ed. July 26, 2002), for the text, debate, and
vote on the Quinn amendment.

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act of personnel shall not alter the terms and conditions of employment, including
compensation, of any employee so transferred.”
Subsection (g) of the new section 9701 of title 5 contains a sunset provision for
authority to issue regulations. It provides that, “Effective five years after the date of
enactment of this section, all authority to issue regulations under this section
(including regulations which would modify, supersede, or terminate any regulations
previously issued under this section) shall cease to be available.”
The new section 9701(c), referred to in section 9701(b)(3)(D) quoted earlier,
identifies other provisions of title 5 that are not subject to waiver–subpart A “General
Provisions,” which includes chapters 21 “Definitions,” 23 “Merit System Principles,”
and 29 “Commissions, Oaths, Records, and Reports;” subpart B “Employment and
Retention,” which includes chapters 31 “Authority for Employment,” 33
“Examination, Selection, and Placement,” 34 “Part-time Career Employment
Opportunities,” 35 “Retention Preference, Restoration, and Reemployment;” subpart
E “Attendance and Leave,” which includes chapters 61 “Hours of Work,” and 63
“Leave;” subchapter G “Insurance and Annuities,” which includes chapters 81
“Compensation for Work Injuries,” 83 “Retirement [in the Civil Service Retirement
System], 84 “Federal Employees’ Retirement System,” 85 “Unemployment
Compensation,” 87 “Life Insurance,” 88 “Health Insurance,” and 90 “Long-Term
Care Insurance;” and subpart H, “Access to Criminal History Record Information,”
which includes chapter 91 “Access to Criminal History Records for National Security
and Other Purposes.”4
In listing the subparts of part III of title 5 that may not be waived, the new section
9701(c) of title 5 excludes subparts C “Employee Performance,” D “Pay and
Allowances,” and F “Labor-Management and Employee Relations.” Nonetheless, this
subsection provides that the following chapters within those subparts also may not be
waived: chapters 41 “Training,” 45 “Incentive Awards,” and 47 “Personnel Research
Programs and Demonstration Projects” in subpart C; chapters 55 “Pay
Administration,” 57 “Travel, Transportation, and Subsistence,” and 59 “Allowances”
in subpart D; and chapters 72 “Antidiscrimination; Right to Petition Congress,” 73
“Suitability, Security, and Conduct,” and 79 “Services to Congress” in subpart F.
Section 9701(c) also provides that chapter 97, the chapter created by H.R. 5005, may
not be waived.
Title 5 Chapters Eligible for Adjustment. In the report accompanying
H.R. 5005, the House Select Committee on Homeland Security stated that:
The following chapters of title 5 are eligible for adjustment
during the Department’s process of developing a human resource
system under the chapter added by this section [i.e., chapter 97]:
chapter 43 “Performance Appraisal,” chapter 51 “Classification,”
chapter 53 “Pay Rates and Systems,” chapter 71 “Labor
4See (name redacted), General Management Laws: A Selective Compendium–107th
Congress, Congressional Research Service Report RL30795, for synopses of many of these
chapters of title 5.

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Management Relations (except as to employee rights to organize,
collectively bargain and participate in union organizations as set
out [in the bill]), chapter 75 “Adverse Actions,” and chapter 77
“Appeals.”
H. Rep. No. 609, pt. I, 107th Cong., 2d Sess. 122 (2002).
A summary issued by the House Select Committee on Homeland Security
described section 761 of H.R. 5005 and the need for a new human resources
management system:
Creating the right organization for Homeland Security is
important, but so is having the management tools and flexibility
to create an agile 21st century workforce that can respond to the
shifting threat. H.R. 5005 grants the Secretary of Homeland
Security greater flexibility in the following areas of personnel
management:
Performance Appraisal
The Secretary will have the flexibility to develop a strategic
performance management program that effectively links
employee performance and accountability to the goals, objectives
and mission of the Department. Existing laws focus on specifying
minimum requirements for an employee’s position with no
consideration of its connection to mission, strategic goals, and
objectives.
Classification
The Secretary will have the flexibility to use a broader
approach to job classification that more effectively recognizes the
strategic value of each employee. The current classification is 53
years old. It is obsolete. It confines federal workers to 15
artificial levels or “grades” that no longer match the needs of a
modern workforce or allow for quick changes of mission. It
defines pay too rigidly to support rewarding performance in a
meaningful way. It ignores important differences across
occupational lines and career paths that the Department must
manage.
Pay Rates and Systems
The Department will have the flexibility it needs to attract
skilled and dedicated workers with a modern pay system not
necessarily restricted to the rigid 15 “GS” [General Schedule] pay
grades. Annual increases in pay are most commonly automatic
pay adjustments for all employees regardless of performance.
. . .

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Adverse Actions and Appeal
The Secretary must have the flexibility to establish a system
that allows employees to challenge and appeal agency personnel
actions without threatening the mission of the Department. The
procedures for providing due process to employees subject to
adverse actions are unnecessarily complex and time consuming.
Regardless of the nature of the offense, agencies must provide
employees at least 30 days notice prior to taking any action.
These procedures often result in expensive and protracted
litigation in both administrative and judicial forms [sic]. The
delay in reaching finality negatively impacts on an agency’s
ability to carry out its mission.
The Select Committee also protected many existing
employee protections. Needless to say, civil rights protections
remain. Veterans continue to be rewarded for serving their
country by continuing veteran hiring preferences. Age
discrimination is prohibited. The workplace will be accessible to
the disabled. The Fair Labor Standards Act, the Social Security
Act and the Family and Medical Leave Act will continue to
apply.
U.S. House of Representatives, Select Committee on Homeland Security,
Transforming Government for the 21st Century 3-4 (July 23, 2002), available at
http://hsc.house.gov/legislation/final.asp (Transforming Government).
This summary describes some provisions of current law, located in title 5
chapters 43 “Performance Appraisal,” 51 “Classification,” 53 “Pay Rates and
Systems,” 75 “Adverse Actions,” and 77 “Appeals,” that the Select Committee in its
report identified as being subject to adjustment during the Department’s process of
developing a human resource system and that the summary characterized as lacking
flexibility.
Chapter 43 “Performance Appraisal”. A provision of chapter 43,
section 4301(1), defines “agency” for purpose of subchapter I “General Provisions”
of the chapter as “...an executive agency, and the Government Printing Office, but
does not include the Central Intelligence Agency, the Defense Intelligence Agency,
the National Imagery and Mapping Agency, the National Security Agency; or any
executive agency or unit thereof which is designated by the President and the
principal function of which is the conduct of foreign intelligence or
counterintelligence activities; or the General Accounting Office.” 5 U.S.C. § 4301(1).
(Emphasis supplied.)
Section 4301(1) grants the President authority to exclude an executive agency or
unit thereof from coverage if the principal function of the agency or unit is the conduct
of foreign intelligence or counterintelligence activities. The version of H.R. 5005 that
has passed the House makes chapter 43 subject to adjustment by the Secretary of

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Homeland Security, in regulations prescribed jointly with the Director of the Office
of Personnel Management, when a new human resources management system is
established.
If Congress in later consideration of Homeland Security legislation were not to
include chapter 43 as one that is subject to adjustment by the Secretary, an interesting
question arises: Could the President nonetheless exclude the Department of
Homeland Security or any unit thereof from coverage under chapter 43 by exercising
his existing authority in section 4301(1) of title 5 to exclude an agency or unit on the
ground that its principal mission is to conduct foreign intelligence or
counterintelligence activities?
On the surface, limiting the President’s authority to exclude agencies or entities
thereof to those whose principal mission is conducting foreign intelligence or
counterintelligence activities would appear to preclude the President from excluding
the Department of Homeland Security or a unit thereof. The primary purpose of the
Department of Homeland Security is to protect the homeland not to conduct foreign
intelligence or counterintelligence activities, although the Department’s proposed
Intelligence Analysis Center is assigned the function of analyzing intelligence, some
of which may be foreign intelligence. See, for example, section 201, which grants to
the Under Secretary for Information Analysis and Infrastructure Protection authority
to conduct analysis of information, including foreign intelligence, and sections 211
and 212 of H.R. 5005, which establish the Intelligence Analysis Center and designate
its mission, respectively.
Nonetheless, while section 4303(1) sets a standard for agencies and units that
may be excluded, it seems to leave to the judgment of the President the question
regarding whether the principal function of any particular agency or unit is conducting
foreign intelligence or counterintelligence activities. Consequently, it appears that the
President possibly could exclude the Department or a unit thereof from coverage of
chapter 43 on this basis and leave a question of resolving the matter of the legality of
such an exclusion to the courts if a lawsuit challenging an exclusion should be filed
and the courts should grant jurisdiction to entertain such a suit.

Section 4302 of title 5 directs each agency to develop one or more performance
appraisal systems which provide for periodic appraisal of job performance of
employees; encourage employee participation in establishing performance standards;
and use the results of performance appraisals as a basis for training, rewarding,
reassigning, promoting, reducing in grade, retaining, and removing employees. Under
regulations prescribed by the Office of Personnel Management, each performance
appraisal system shall provide for establishing performance standards to do such
things as permit the accurate evaluation of job performance, recognize and reward
employees on standards of performance and critical elements of their positions, and
reassign, reduce in grade, or remove employees who continue to have unacceptable
performance. “Unacceptable performance” is defined as “performance of an
employee which fails to meet established performance standards in one or more
critical elements of such employee’s position.” 5 U.S.C. § 4301(3).
Subject to certain provisions, an agency may reduce in grade or remove an
employee for unacceptable performance. An employee whose reduction in grade or

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removal for unacceptable performance is proposed is entitled to--(A) 30 days advance
written notice which identifies specific instances of unacceptable performance, and
critical elements of an employee’s position involved in each instance of unacceptable
performance; (B) be represented by an attorney or other representative; (C) a
reasonable time to answer orally and in writing; and (D) a written decision of the
action recommended. An agency, under regulations prescribed by the agency head,
may extend the notice period for not more than 30 days. An agency may extend the
notice period for more than 30 days only in accordance with regulations issued by the
Office of Personnel Management. 5 U.S.C. § 4303.
The decision to retain, reduce in grade, or remove an employee shall be made
within 30 days after the expiration of the notice period. A decision to reduce in grade
or remove an employee may be based only on those instances of unacceptable
performance by the employee which occurred during the one year evaluation period
and for which there is compliance with the notice and other requirements of section
4303. Id.
If, because of performance improvement by an employee during the notice
period, the employee is not reduced in grade or removed, and the employee’s
performance continues to be acceptable for one year from the date of the advance
written notice, any entry or other notation of the unacceptable performance for which
the action was proposed shall be removed from any agency record relating to the
employee. Id.
Any qualifying employee who has been reduced in grade or removed under
section 4303 is entitled to appeal the action to the Merit Systems Protection Board
under section 7701 of title 5. Id. The right to appeal a reduction in grade or removal
under this section is granted to any employee who is a preference eligible, see 5
U.S.C. § 2108(3) for the definition of “preference eligible,” i.e., certain veterans who
have served in some conflicts and some of their relatives, and to any employee in the
competitive service. It also is granted to any employee in the excepted service and
to one covered by subchapter II of chapter 75, i.e., an individual in the excepted
service (other than a preference eligible) who is not serving a probationary or trial
period pending conversion to the competitive service, and to an individual in the
excepted service who has completed two years of current continuous service in the
same or similar positions in an executive agency other than a temporary appointment
limited to two years or less. Id.
Section 4303 does not apply to the reduction to the grade previously held of a
supervisor or manager who has not completed the probationary period under section
3321(a)(2) of title 5, the reduction in grade or removal of a competitive service
employee who is serving a probationary or trial period under an initial appointment
or who has not completed one year of current continuous employment under other
than a temporary appointment limited to one year or less, or the reduction in grade or
removal of an employee in the excepted service who has not completed one year of
current continuous employment in the same or similar positions. Id.
Subchapter II “Performance Appraisal in the Senior Executive Service” of
chapter 43 incorporates the definition of “agency” from section 3132(a) of title 5 in
the subchapter that establishes the Senior Executive Service. Section 3132(a) defines

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“agency” as an executive agency, except a government corporation and the General
Accounting Office, but does not include “any agency or unit thereof excluded from
coverage by the President under subsection (c) of this section” as well as a number of
agencies including the Federal Bureau of Investigation, the Drug Enforcement
Administration, the Central Intelligence Agency “...and, as determined by the
President, an executive agency, or unit thereof, whose principal function is the
conduct of foreign intelligence or counterintelligence activities;....”
Section 3132(c) of title 5 authorizes an agency to file an application with the
Office of Personnel Management setting forth reasons why it, or a unit thereof, should
be excluded from subchapter II, which establishes the Senior Executive Service, of
chapter 31 “Authority for Employment.” The Office is required to review the
application and stated reasons, undertake a review to determine whether the agency
or unit should be excluded from coverage under the subchapter, and, upon completing
its review, recommend to the President whether the agency or unit should be excluded
from coverage. If the Office recommends that an agency or unit thereof should be
excluded from coverage, the President on written determination may exclude the
agency or unit for the period determined by the President to be appropriate.
A provision of chapter 43, section 4312 of title 5, requires each agency, in
accordance with standards developed by the Office of Personnel Management, to
develop one or more performance appraisal systems for the Senior Executive Service.
These systems are designed to permit the accurate evaluation of performance in any
position, provide for systematic appraisals of performance, encourage excellence in
performance, and provide a basis for making eligibility determinations for retention
and performance awards in the Senior Executive Service. A senior executive may not
appeal any appraisal and rating under any performance appraisal system under section
4312. 5 U.S.C. § 4312.
Appraisals of performance in the Senior Executive Service must be based on both
individual and organizational performance, taking into account such factors as
improvements in efficiency, productivity, quality of work or service; cost efficiency;
timeliness of performance; meeting affirmative action goals and achieving equal
employment opportunity requirements, and complying with merit system principles
set forth under section 2301 of title 5. 5 U.S.C. § 4313.
Each Senior Executive Service performance appraisal system must provide for
annual summary ratings of one or more fully successful levels, a minimally
satisfactory level, and an unsatisfactory level. Any career senior executive who
receives a rating at any of the fully successful levels may be given a performance
award under section 5384 of title 5. Any senior executive who receives an
unsatisfactory rating shall be reassigned or transferred within the Senior Executive
Service or removed from it. Any senior executive who receives two unsatisfactory
ratings in any period of five consecutive years must be removed from the SES, as
must any senior executive who twice in any period of three consecutive years receives
less than fully successful ratings. 5 U.S.C. 4314.

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Chapter 51 “Classification”. H.R. 5005's proposed new section 9701
of title 5 of the United States Code permits the Secretary of the Department of
Homeland Security, in regulations prescribed jointly with the Office of Personnel
Management, to adjust provisions of chapter 51 “Classification.” As noted earlier, the
summary issued by the Select Committee on Homeland Security asserts that this
chapter is being made subject to adjustment because the Secretary needs “the
flexibility to use a broader approach to job classification that more effectively
recognizes the strategic value of each employee.” It characterizes the current
classification system as “53 years old” and “obsolete.” Transforming Government at
3.
A provision of chapter 51, section 5102, defines “agency,” among other things,
as “an executive agency” and expressly excludes entities such as the Central
Intelligence Agency, the Defense Intelligence Agency, and the National Imagery and
Mapping Agency from coverage. Unlike section 4301, the definitions section of
chapter 43 relating to performance appraisal, section 5102 does not grant the President
authority to exclude an agency or unit thereof from coverage of chapter 51 on the
ground that the principal mission is conducting foreign intelligence or
counterintelligence.
Nonetheless, section 5103 states that, “The Office of Personnel Management
shall determine finally the applicability of section 5102 of this title to specific
positions and employees, except for positions in the Office of the Architect of the
Capitol.” It appears that if Congress in later consideration of Department of
Homeland Security legislation were to make chapter 51 apply to the Department,
OPM, pursuant to section 5103, would be authorized to exempt applicability of
chapter 51 to “specific positions and employees.”
Section 5104 prescribes the basis for grading Grades 1 through 15 of the General
Schedule, based on the difficulty and responsibility of work, ranging from the
“simplest routine work in office, business, or fiscal operations...with little or no
latitude for the exercise of independent judgment” (GS-1) to “work of outstanding
difficulty and responsibility...with very wide latitude for the exercise of independent
judgment” (GS-15). Provisions of chapter 51 direct the Office of Personnel
Management, after consulting with agencies, to prepare standards for placing positions
in their proper classes and grades, require that each position must be placed in its
appropriate class, based on the duties and responsibilities. These provisions also state
that each class must be placed in its appropriate grade based on the level of difficulty,
responsibility, and qualification requirements, and mandate that each agency must
place each position in its jurisdiction in its appropriate class and grade. 5 U.S.C. §§
5105-5107.
Some provisions of chapter 51 impose duties on the Office of Personnel
Management to do such things as establish and revise the maximum number of
positions which at any one time may be classified above GS-15 and establish
standards and procedures in accordance with which positions may be classified above
GS-15, review whether agencies are placing positions in classes and grades in
conformance with or consistently with published standards and, if necessary,
reclassify positions in the appropriate classes and grades. 5 U.S.C. §§ 5109 and 5110.
The Office also is authorized to revoke or suspend authority that had been granted to

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an agency to place positions in appropriate classes and grades and place in appropriate
classes and grades newly created positions and change positions from one class or
grade to another when facts warrant. 5 U.S.C. §§ 5111 and 5112.
Chapter 53 “Pay Rates and Systems”. Chapter 53 is another chapter
of title 5 that would be subject to adjustment by the Secretary of Homeland Security.
As noted earlier, the summary issued by the Select Committee on Homeland Security
suggests that the current federal pay system lacks the flexibility that the Department
will need to attract skilled and dedicated workers and that the Department needs a pay
system “not necessarily restricted to the 15 “GS” pay grades.” It also seems to object
to what it characterizes as “annual increases in pay” that “are most commonly
automatic pay adjustments for all employees regardless of performance.”
Transforming Government at 4.
The proposed new section 9701 of title 5, a subsection of section 761 of H.R.
5005, and section 812(e)(2) address pay. Subsection (d) “Limitations Relating to Pay”
of the new section 9701 provides that:
Nothing in this section [the new section 9701] shall constitute authority--,
(1) to modify the pay of any employee who serves in–
(A) an Executive Schedule position under
subchapter II of chapter 53 of title 5, United States
Code; or
(B) a position for which the rate of basic pay is
fixed by statute by reference to a section or level under
subchapter II of chapter 53 of such title 5;
(2) to fix pay for any employee or position at an annual rate
greater than the maximum amount of cash compensation
allowable under section 5307 of such title 5 in a year [level 1 of
the Executive Schedule, $166,700 as of January of 2002]; or
(3) to exempt any employee from the application of such
section 5307.
Subsection (b) “Effect on Personnel” of section 761 of H.R. 5005, which is not
part of the new section 9701 of title 5, provides that:
(1) Nonseparation or Nonreduction in Grade or
Compensation of Full-time Personnel Holding Permanent
Positions.–Except as otherwise provided in this act, the transfer
pursuant to this act of full-time personnel (except special
government employees) and part-time personnel holding
permanent positions shall not cause any such employee to be
separated or reduced in grade or compensation for one year after
the date of transfer to the Department.

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(2) Positions Compensated in Accordance with Executive
Schedule.–Any person who, on the day preceding such person’s
date of transfer pursuant to this act, held a position compensated
in accordance with the Executive Schedule prescribed in chapter
53 of title 5, United States Code, and who, without a break in
service, is appointed in the Department to a position having
duties comparable to the duties performed immediately preceding
such appointment shall continue to be compensated in such new
position at not less than the rate provided for such previous
position, for the duration of the service of such person in such
new position.
(3) Coordination Rule.–Any exercise of authority under
chapter 97 of title 5, United States Code (as amended by
subsection (a)), including under any system established under
such chapter, shall be in conformance with the requirements of
this subsection.
As mentioned earlier, section 812(e)(2) of H.R. 5005, a savings provision
relating to employment, states that, “except as otherwise provided in this act, or under
authority granted by this act, the transfer pursuant to this act of personnel shall not
alter the terms and conditions of employment, including compensation, of any
employee so transferred.”
Another provision of H.R. 5005, section 772 “Review of Pay and Benefit Plans,”
addresses the issue of disparities in pay and benefits of agencies proposed for transfer
to the Department of Homeland Security.
Notwithstanding any other provision of this act, the
Secretary shall, in consultation with the Director of the Office of
Personnel Management, review the pay and benefit plans of each
agency whose functions are transferred under this act to the
Department and, within 90 days after the date of enactment,
submit a plan to the President of the Senate and the Speaker of
the House of Representatives, and the appropriate committees
and subcommittees, for ensuring, to the maximum extent
practicable, the elimination of disparities in pay and benefits
throughout the Department, especially among law enforcement
personnel, that are inconsistent with merit system principles set
forth in section 2301 of title 5, United States Code.
Although the new section 9701 generally authorizes the Secretary of Homeland
Security to adjust provisions of chapter 53, section 451 (b) “Maintenance of Customs
Revenue Functions” of H.R. 5005 denies authority to “...reduce the staffing level, or
the compensation or benefits under title 5, United States Code...” of certain employees
of the Customs Service who perform revenue functions. These positions include
Import Specialists, Entry Specialists, Fines and Penalties Specialists, attorneys of the
Office of Regulations and Rulings, and International Trade Specialists.

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Chapter 53 of title 5 has nine subchapters, I “Pay Comparability System,” II
“Executive Schedule Pay Rates,” III “General Schedule Pay Rates,” IV “Prevailing
Rate Systems,” V “Student-Employees,” VI “Grade and Pay Retention,” VII
“Miscellaneous Provisions,” VIII “Pay for the Senior Executive Service,” and IX
“Special Occupational Pay Systems.”
The Pay Comparability System is based on the policy that, among other things,
federal pay rates should be comparable with nonfederal pay rates for the same levels
of work within the same local pay area and that existing pay disparities between
federal and nonfederal employees should be reduced. 5 U.S.C. § 5301. This system
provides for annual adjustments in pay schedules for the General Schedule of one-half
percent less than the rate of change in private sector wages for a given time period and
locality based comparability payments unless the President determines that levels of
these adjustments and payments are inappropriate because of serious economic
conditions or serious economic conditions affecting the general welfare. Pay under
the General Schedule, excluding locality based comparability pay, may not be paid in
excess of level V of the Executive Schedule, $121,600 as of January 1, 2002, and,
when combined with locality based comparability pay, for most employees may not
exceed level IV of the Executive Schedule, $130,000 as of January of 2002. 5 U.S.C.
§§ 5303, 5304 and 5304a.
Whenever the President finds that the government’s recruitment or retention
efforts with respect to one or more occupations or one or more areas or locations are,
or are likely to become, significantly handicapped, the President may establish for
areas or locations involved higher minimum rates of basic pay for one or more grades
or levels, occupational groups, series, classes, or subdivisions thereof, and may make
corresponding increases in all step rates of the pay range for each such grade or level.
The amount of such increase may not exceed the maximum pay rate prescribed by
statute for the grade or level by more than 30 percent. No rate may be established
under this authority (disregarding locality based comparability payments) in excess
of the basic rate payable for level V of the Executive Schedule. Locality based
comparability pay may be paid to persons paid under this special pay authority, but the
rate of basic pay when combined with the locality based comparability pay may not
exceed level IV of the Executive Schedule. 5 U.S.C. § 5305.
Except as otherwise permitted by law, the maximum amount of cash
compensation for employees, including total basic pay and any allowance, differential,
bonus, award, or other cash payment, is capped at the annual rate of basic pay for
level I of the Executive Schedule, the rate paid to cabinet secretaries and some other
officials, $166,700 as of January of 2002. 5 U.S.C. § 5307.
The Executive Schedule, which is divided into five levels, with level I being the
highest, is the basic pay schedule for high positions, other than the Senior Executive
Service and the Federal Bureau of Investigation and Drug Enforcement Senior
Executive Service. Subchapter II identifies officials at each level, ranging from
cabinet secretaries and some others at level I to such officials as Associate
Administrators at the Small Business Administration and the National Aeronautics
and Space Administration at level V. 5 U.S.C. §§ 5312-5316.

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Section 902 of H.R. 5005, as passed by the House, amends section 5312 of title
5 to place the Secretary of Homeland Security in level I of the Executive Schedule,
section 5313 to place the Deputy Secretary of Homeland Security in level II, section
5314 to place the Under Secretaries of Homeland Security in level III, and section
5315 to place the Assistant Secretaries, General Counsel, Chief Financial Officer,
Chief Information Officer, and Inspector General of the Department of Homeland
Security in level IV. As of January of 2002, the basic pay is $166,700 for level I,
$150,000 for level II, $138,200 for level III, and $130,000 for level IV.

Subchapter III “General Schedule Pay Rates”of chapter 53 of title 5 applies to
employees and positions covered by chapter 51 “Classification.” 5 U.S.C. § 5331.
The General Schedule is a schedule of annual rates of basic pay, consisting of 15
grades designated “GS-1" through “GS-15" consecutively, which correspond to the
classification levels set out in chapter 51. Each grade has ten rates of pay called steps.
Pay rates in the general schedule are adjusted annually in accordance with section
5303, a provision in the pay comparability system. 5 U.S.C. § 5332. The rate of basic
pay to which an employee is entitled is governed by regulations prescribed by the
Office of Personnel Management in conformity with subchapter III of chapter 53 and
chapter 51 of title 5 when, for example, the employee is demoted to a position in a
lower grade, employment status is otherwise changed, or the employee’s position is
changed from one grade to another. 5 U.S.C. § 5334.
An employee who is promoted or transferred to a position in a higher grade is
entitled to basic pay at the lowest rate, i.e., step, of the higher grade which exceeds the
existing rate of basic pay by not less than two step increases of the grade from which
the employee is promoted or transferred. Id.
An employee who is paid on an annual basis and occupies a permanent position
within the General Schedule, who has not reached the maximum rate of pay for the
employee’s grade, must be advanced in pay successively to the next higher step within
the grade after completing each 52 calendar weeks in steps 1,2 and 3, each 104 weeks
in steps 4,5, and 6, and each 156 calendar weeks in pay rates 7, 8, and 9, provided that
the employee did not receive an equivalent increase in pay from any cause during that
period and the work of the employee is at an acceptable level of competence as
determined by the agency head. 5 U.S.C. § 5335.
When a determination is made that the work of an employee is not at an
acceptable level of competence, the employee is entitled to prompt written notice of
that determination and an opportunity for reconsideration within the agency under
uniform procedures prescribed by the Office of Personnel Management. If the
determination is affirmed on reconsideration, the employee is entitled to appeal to the
Merit Systems Protection Board. If the reconsideration or appeal results in a reversal
of the earlier determination, the new determination supersedes the earlier one and is
deemed to have been made as of the date of the earlier one. Id.
The authority of the Office of Personnel Management and the entitlement to
appeal to the Board do not apply to a determination of acceptable level of competence
made by the Librarian of Congress. Id. Section 5335, regarding step increases, does
not apply to the pay of an individual appointed by the President, by and with the
consent of the Senate. Id. Within the limit of available appropriations and under

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regulations prescribed by the Office of Personnel Management, the head of each
agency may grant additional step increases, not to exceed one such increase within any
52 week period, to recognize high quality performance. 5 U.S.C. § 5336.

Subchapter VI “Grade and Pay Retention” of chapter 53 provides that any
employee who is placed as a result of reduction in force procedures in a lower grade
than the previous position and who has served for 52 consecutive weeks or more at
the higher grade is entitled to retain the higher grade for two years beginning on the
date of placement in the lower grade. 5 U.S.C. § 5362.
Any employee whose position has been reduced in grade also is entitled to retain
the higher grade for two years beginning on the date the grade was reduced. After the
expiration of the two year period for grade retention, an employee is entitled to basic
pay at a rate equal to an employee’s allowable former rate of basic pay plus 50
percent of the amount of each increase in the maximum rate of basic pay payable for
the grade of the employee’s position immediately after such reduction in pay if the
allowable former rate exceeds the maximum rate for the grade. 5 U.S.C. 5363.
If grade or pay retention benefits are terminated because an employee declines
a reasonable offer of a position whose grade or pay were equal to or greater than the
employee’s retained grade or pay, the termination may be appealed to the Office of
Personnel Management, but may not be appealed elsewhere or made the subject of a
grievance under a negotiated grievance procedure. 5 U.S.C. § 5366.
As noted earlier, section 761(b) of H.R. 5005, as passed by the House, provides
that the grade or compensation of any employee transferred to the Department of
Homeland Security may not be reduced for one year after the date of the transfer.
Moreover, any person who held a position compensated under the Executive Schedule
on the day preceding transfer to the Department of Homeland must continue to be
compensated in the new position at not less than the rate paid in the previous position
if there is not break in service and duties at the Department are comparable to those
performed immediately preceding appointment.
Pay Flexibility in Current Law. In its summary of H.R. 5005, the House Select
Committee on Homeland Security expresses dissatisfaction with the modern pay
system that is restricted to the “rigid 15 ‘GS’ pay grades.” Transforming Government
at 4. Some provisions of chapter 53 illustrate more flexible authority to set pay rates.
For example, section 5376 “Pay for certain senior level positions,” a provision in
subchapter VII “Miscellaneous” of title 5, authorizes agency heads to fix rates for
positions classified above GS-15 pursuant to section 5108 and scientific and
professional positions established under section 3104 of title 5, but not Senior
Executive Service positions, at not less 120 percent of the minimum rate of basic pay
for GS-15 (the basic pay for GS-15, step 1 is $82,580 as of January of 2002) and not
greater than level IV of the Executive Schedule ($130,000 as of January of 2002).
Section 5377 “Pay authority for critical positions” authorizes fixing payments not
greater than level I of the Executive Schedule, $166,700, as of January of 2002, for
up to 800 positions governmentwide for positions which require expertise of an
extremely high level in a scientific, technical, professional, or administrative field; and
which are critical to an agency’s successful accomplishment of an important mission.

CRS-16
The Office of Management and Budget, in consultation with the Office of Personnel
Management, is authorized to grant agencies authority to make such appointments.
The cap of level I may not be exceeded except upon written approval of the President.
Another example of some measure of pay flexibility in current law is pay for
Senior Executive Service positions. Section 5382 states that there shall be five or
more rates of basic pay for the SES, ranging from not less than 120% of the minimum
rate of basic pay for GS-15 to not more than level IV of the Executive Schedule, and
that each senior executive shall be paid at one of the rates. To encourage excellence
in performance by career executives, performance awards of not less than five percent
nor more than 20 percent of basic pay may be paid to them, but the aggregate amount
of money available to pay these awards is limited. 5 U.S.C. § 5384.
While there are pay flexibilities in current law and H.R. 5005, if enacted in its
current form, would permit pay flexibility, the new section 9701(d)(2) of title 5, as
noted earlier, imposes a limit on the total amount of cash compensation that any
Department of Homeland Security employee would be able to receive. It states, in
relevant part, that, “Nothing in this section shall constitute authority–...(2) to fix the
pay for any employee for a position at an annual rate greater then the maximum rate
of cash compensation allowable under section 5307 of such title 5 in a year; or (3) to
exempt any employee from the application of such section 5307.” Section 5307
provides that, except as otherwise permitted by law, no allowance, differential, bonus,
award, or other similar cash payment, when added to total basic pay, may exceed the
annual rate of basic pay payable for level I of the Executive Schedule, $166,700 as of
January of 2002.
Premium Pay Provisions. While the new section 9701 of title 5 generally
would permit the Secretary of the Department of Homeland Security to adjust
provisions of chapter 53 of title 5 of the United States Code, which prescribes rates
of pay that correspond to position classifications, some agencies scheduled for transfer
to the Department have been granted authority in provisions outside of title 5 to pay
employees at premium rates for overtime. See, for example, section 267 of title 19,
which provides authority to pay Customs officers at premium rates. These pay
authorities outside of title 5 would appear to continue in effect when these agencies
are transferred.
Chapter 75 “Adverse Actions”. Chapter 75 of title 5 also is eligible
for adjustment by the Secretary of Homeland Security under H.R. 5005. The summary
issued by the House Select Committee on Homeland Security characterizes the
procedures for providing due process to employees subject to adverse actions in
chapter 75 and appeals in chapter 77 as
...unnecessarily complex and time consuming. Regardless
of the nature of the offense, agencies must provide employees at
least 30 days notice prior to taking any action. These procedures
often result in expensive and protracted litigation in both
administrative and judicial forms [sic]. The delay in reaching

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finality negatively impacts on an agency’s ability to carry out its
mission.
Transforming Government at 4.
Chapter 75 of title 5 “Adverse Actions” has five subchapters, I “Suspension for
14 Days or Less,” II “Removal, Suspension for More than 14 Days, Reduction in
Grade or Pay, or Furlough for 30 Days or Less,” III “Administrative Law Judges,” IV
“National Security,” and V “Senior Executive Service.”
“Adverse action” refers to disciplinary action taken “for such cause as will
promote the efficiency of the [civil] service.” Disciplinary action taken under adverse
action procedures in chapter 75 differs from action taken pursuant to chapter 43
“Performance Appraisal” for unacceptable performance.
Subchapter I defines “employee” as an individual in the competitive service who
is not serving a probationary or trial period under an initial appointment or who has
completed one year of current continuous service in the same or similar positions
under other than a temporary appointment. “Suspension” is defined as placing an
employee for disciplinary reasons in a temporary status without duties and pay.
An employee against whom a suspension of 14 days or less is proposed is
entitled to--
(1) an advance written notice stating the specific reasons for
the proposed action;
(2) a reasonable time to answer orally and in writing and to
furnish affidavits and other documentary evidence in support of
the answer;
(3) be represented by an attorney or other representative; and
(4) a written decision and the specific reasons therefor at the
earlier practicable date.
5 U.S.C. § 7503.
Section 7503 does not provide for a right to appeal a suspension for 14 days or less.
Subchapter II, which applies to removal, suspension for more than 14 days,
reduction in grade or pay, or furlough for 30 days or less, defines “employee” more
broadly, to include not only an individual in the competitive service, but also a
preference eligible (a qualifying veteran) in the excepted service who has completed
one year of current continuous service in an executive agency or the United States
Postal Service or the Postal Rate Commission. “Employee” also is defined as an
individual (not a preference eligible) in the excepted service who is not serving a
probationary period under an initial appointment pending conversion to the
competitive service or who has completed two years of current, continuous
employment in the same or similar positions in an executive agency under other than

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a temporary appointment limited to two years or less. 5 U.S.C. § 7511. “Suspension”
has the same meaning as it does in section 7501(2) of title 5. “Furlough” means
placing an employee in a temporary status without duties and pay because of lack of
work or funds or other nondisciplinary reasons. Id.
An employee against whom an action under subchapter II is proposed is entitled
to--
(1) at least 30 days’ advance written notice, unless there is
reasonable cause to believe that an employee has committed a
crime for which a sentence of imprisonment may be imposed,
stating the specific reasons for the proposed action;
(2) a reasonable time, but not less than seven days, to answer
orally and in writing and to furnish affidavits and other
documentary evidence in support of the answer;
(3) be represented by an attorney or other representative; and
(4) a written decision and the specific reasons therefor at the
earliest practicable date.
5 U.S.C. § 7513.5
An agency by regulation may provide for a hearing which may be in lieu of or in
addition to the opportunity to answer. An employee against whom an action is taken
is entitled to appeal to the Merit Systems Protection Board. Id.
Pursuant to subchapter III, an action may be taken against an administrative law
judge by the agency in which the administrative law judge is employed only for such
good cause established by the Merit Systems Protection Board on the record after
opportunity for hearing before the Board. 5 U.S.C. § 7521.
Subchapter IV “National Security” defines “agency” as the Departments of State,
Commerce, Justice, Defense, a military department, the Coast Guard, the Atomic
Energy Commission, the National Aeronautics and Space Administration, and “such
other agency of the government of the United States as the President designates in the
best interests of national security.” 5 U.S.C. § 7531.
5Section 414 of H.R. 5005 statutorily amends this procedure for employees of the Bureau
of Border Security. It authorizes the Under Secretary for Border and Transportation
Security, notwithstanding any other provision of law, to impose disciplinary action,
including termination of employment, pursuant to policies and procedures applicable to
employees of the Federal Bureau of Investigation, who do not have rights provided in
subchapter II of chapter 75 unless they are preference eligibles on any employee of the
Bureau of Border Security who willfully deceives Congress or agency leadership on any
matter.

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This delegation of authority to the President to include an agency under the
national security subchapter would appear to permit the President to include the
Department of Homeland Security or units thereof if Congress in later consideration
of homeland security legislation were not to grant the Secretary of Homeland Security
authority to adjust chapter 75 and thereby make the chapter apply to the Department.
This subchapter grants an agency head authority to suspend without pay an
agency employee in the interests of national security.
(a) Notwithstanding other statutes, the head of an agency
may suspend without pay an agency employee when that action
is considered necessary in the interests of national security. To
the extent that the agency head determines that the interests of
national security permit, the suspended employee must be
notified of the reasons for the suspension. Within 30 days after
the notification, the suspended employee is entitled to submit to
the official designated by the agency head statements or affidavits
to show why the employee should be restored to duty.
(b) Subject to subsection (c) of this section, the head of an
agency may remove an employee suspended under subsection (a)
when, after such investigation and review as the agency head
considers necessary, he determines that removal is necessary or
advisable in the interests of national security. The determination
of the head of the agency head is final.
(c) An employee suspended under subsection (a) of this
section who–
(1) has a permanent or indefinite appointment;
(2) has completed a probationary or trial period; and
(3) is a citizen of the United States;
is entitled, after suspension and before removal, to
(A) a written statement of the charges against the employee
within 30 days after suspension, which may be amended within
30 days thereafter, and which must be stated as specifically as
security considerations permit;
(B) an opportunity within 30 days thereafter, plus an
additional 30 days if the charges are amended, to answer the
charges and submit affidavits;
(C) a hearing, at the request of the employee, by an agency
authority duly constituted for this purpose;

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(D) a review of the case by the head of the agency or
designee, before a decision adverse to the employee is made
final; and
(E) a written statement of the decision of the head of the
agency.
5 U.S.C. § 7532.
Under subchapter V “Senior Executive Service,” a career appointee in the Senior
Executive Service who has completed the probationary period or was covered by
adverse action procedures immediately before appointment may be removed from the
civil service or suspended for more than 14 days only for misconduct, neglect of duty,
malfeasance, or failure to accept a directed reassignment or to accompany a position
in a transfer of function. A senior executive against whom removal or suspension is
proposed is entitled to the same rights as those granted in subchapter II, enumerated
in section 7513, and quoted in the discussion of that section above. 5 U.S.C. §§ 7541-
7543. A senior executive who is removed or suspended may appeal the action to the
Merit Systems Protection Board.
Chapter 77 “Appeals”. Chapter 77 is the final chapter of title 5
that is subject to adjustment by the Secretary of the Department of Homeland
Security pursuant to new section 9701 of title 5.
During floor consideration of H.R. 5005, the House by a vote of 227 to 202
agreed to a floor amendment offered by Representative Jack Quinn to add
subsection (f) to section 9701.6 This subsection expresses the sense of Congress that
employees of the Department are entitled to fair treatment in any appeals. In
prescribing regulations, the Secretary of Homeland Security and Director of the
Office of Personnel Management should ensure that employees are afforded the
protections of due process and, toward that end, should be required to consult with
the Merit Systems Protection Board before issuing any such regulations. Moreover,
any regulations which relate to matters within the purview of chapter 77 [“Appeals”]
shall be issued only after consultation with the Board and shall ensure the
availability of procedures which shall be consistent with due process and provide,
to the maximum extent practicable, for the expeditious handling of matters
involving the Department of Homeland Security.
Under chapter 77, an employee or applicant for employment may submit an
appeal to the Merit Systems Protection Board from any action which is appealable
to the Board under any law, rule, or regulation. An appellant has the right to a
hearing for which a transcript will be kept and to representation by an attorney or
other representative. 5 U.S.C. § 7701
The Board may hear any case appealed to it or may refer the case to an
administrative law judge or other Board employee designated to hear cases. If an
6See 148 Cong, Rec. H5808-5313 (daily ed. July 26, 2002), for the text, debate, and
vote on the Quinn amendment.

CRS-21
employee or applicant prevails, the employee or applicant shall be granted the relief
provided in the decision effective on making the decision. The decision remains in
effect pending the outcome of any petition for review unless the deciding official
determines that granting such relief is not appropriate or the relief granted provides
that the employee or applicant should return to the place of employment pending the
outcome of any petition for review and the employing agency determines that the
return or presence of the employee or applicant is unduly disruptive to the work
environment. If an agency prevents the return of an employee, the employee must
receive pay, compensation, and all other benefits as terms and conditions of
employment pending the outcome of any petition for review. No award of back pay
or attorney fees shall be paid before a decision is final. Id.
A decision of an agency must be sustained if the agency’s decision in a case
involving unacceptable performance under 5 U.S.C. § 4303 or removal from the
Senior Executive Service for failure to be recertified under 5 U.S.C. 3393a is
supported by substantial evidence. In any other case, an agency’s decision must be
sustained if it is supported by a preponderance of evidence. An agency’s decision,
however, may not be sustained if an employee or applicant shows harmful error in
the application of an agency’s procedures in arriving at its decision, shows that the
decision was based on a prohibited personnel practice described in 5 U.S.C. §
2302(b), or shows that the decision was not in accordance with law. Id.
The Director of the Office of Personnel Management may intervene as a matter
of right in some cases. Except in cases involving discrimination, any decision by
the Board or administrative law judge becomes final unless a party to the appeal or
the Director of the Office of Personnel Management petitions the Board within 30
days after receiving such decision or the Board reopens and reconsiders a case on
its own motion, but the Board, for good cause shown, may extend the 30 day period.
If an employee or applicant prevails, reasonable attorney fees may be required if
warranted in the interest of justice. Id.
In an action appealable to the Board and involving discrimination, the Board,
within 120 days, is required to decide both the issue of discrimination and the
appealable action in accordance with the Board’s appellate procedures. In any
matter before an agency that is appealable to the Board and involves discrimination,
the agency is required to resolve the matter within 120 days. An agency decision in
any such matter is judicially reviewable unless the employee appeals the matter to
the Board. Any Board decision on such a matter is judicially reviewable as of the
date of issuance if the employee or applicant does not file an appeal with the Equal
Employment Opportunity Commission or the date the Commission determines not
to consider the decision. 5 U.S.C. § 7702.
An employee or applicant, within 30 days after notice of a Board decision in
a case of alleged discrimination, may petition the Commission to consider the
decision. The Commission within 30 days must determine whether to consider the
Board decision. A Commission determination not to consider a Board decision may
not be used as evidence with respect to any issue of discrimination in any judicial
proceeding concerning the issue. If the Commission makes a determination to
consider a decision, it must, within 60 days after the date of determination, consider
the entire record, which may be supplemented, and either concur in the Board

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decision or issue in writing another decision which differs from it on the ground
that, as a matter of law, the Board decision incorrectly interpreted any law, rule,
regulation, or policy directive, or the decision involving such provision is not
supported by evidence in the record as a whole. If the Commission concurs with the
decision of the Board, the Board decision is judicially reviewable. Id.
If the Commission issues a decision differing from the Board decision, the
matter immediately must be referred to the Board which, within 30 days, must
concur and adopt the whole Commission decision or reaffirm the initial Board
decision or reaffirm it with such revisions as it determines appropriate. The Board’s
concurrence with an entire Commission decision is judicially reviewable. Id.
If the Board does not concur in whole or in part with the Commission decision,
the Board immediately must certify the matter to a special panel and within five
days transmit the administrative record to it. The special panel, within 45 days after
certification, must decide the issues in dispute and issue a final decision which is
judicially reviewable. The special panel must refer its decision to the Board and the
Board must order an agency to take any appropriate action to carry out the special
panel’s decision. Id.
Notwithstanding any other provision of law, an employee is entitled to file a
civil action in court in the same manner as provided in relevant provisions of the
Civil Rights Act of 1964, 42 U.S.C. § 2000e-16(c), the Age Discrimination Act of
1967, 29 U.S.C. § 633a(c), or the Fair Labor Standards Act of 1938, 29 U.S.C. §
206(b), if there is no judicially reviewable action after prescribed time periods.7 If
there is no judicially appealable action by an agency within 120 days after an action
involving discrimination has been filed, the employee may appeal the matter to the
Board. Nothing in section 7702 of title 5 shall be construed to affect the right to a
trial de novo under certain civil rights laws after a judicially reviewable action. Id.
Any employee or applicant for employment who is adversely affected or
aggrieved by a final order or decision of the Merit Systems Protection Board may
obtain judicial review of the order or decision before the United States Court of
Appeals for the Federal Circuit, except for some cases involving discrimination
which shall be filed in federal district courts. A petition for review before the Court
of Appeals must be filed within 60 days after the petitioner receives notice from the
Merit Systems Protection Board. Such a petition for review of an action involving
discrimination before a district court must be filed within 30 days after notice is
received of a judicially reviewable action. 5 U.S.C. § 7703.
In any case filed in the Court of Appeals for the Federal Circuit, the court is
required to review the record and set aside any agency action, findings, or
conclusions found to be–(1) arbitrary, capricious, an abuse of discretion, or
otherwise not in accordance with law; (2) obtained without procedures required by
7Although this provision appears in a chapter that is subject to adjustment by the Secretary,
proposed section 9701(b), quoted at p. 2 above, states that the human resources management
system may not waive, modify, or otherwise affect any provision of law relating to
discrimination on the basis of such things as race, age, or gender protected by these statutes.

CRS-23
law, rule, or regulation having been followed; or (3) unsupported by substantial
evidence. In a case involving discrimination, the employee or applicant has the right
to have the facts subject to trial de novo by the reviewing court. Id.
The Director of the Office of Personnel Management may obtain judicial
review of any order or decision of the Board by filing, within 60 days after receiving
notice, a petition before the Court of Appeals for the Federal Circuit if the Director
believes that the Board erred in interpreting a civil service law, rule, or regulation
and that the Board’s decision will have substantial impact on a civil service law,
rule, or regulation, or policy directive. Granting such a petition for review is at the
discretion of the Court of Appeals. Id.
House Debate: Waxman-Frost Amendment. During debate on
H.R. 5005, the House considered Amendment No. 20, offered by Representatives
Henry A. Waxman and Martin Frost, that would have stricken section 761, as
reported from the Select Committee on Homeland Security, and substituted a new
section 761.8
The proposed substitute (a) (1) generally authorized the Secretary of Homeland
Security, notwithstanding any provision of title 5, United States Code, in regulations
prescribed jointly with the Director of the Office of Personnel Management, to
provide for such adjustment in rates of basic pay as may be necessary to address
inequitable pay disparities among employees within the Department who perform
similar work in similar circumstances, but (2) denied using this authority for any
employee who serves in an Executive Schedule position or position whose rate of
basic pay is fixed in statute by reference to the Executive Schedule, and (3) denied
authority to fix pay at a rate greater than the maximum of cash compensation
allowable under section 5307 of title 5 or to exempt any employee from section
5307. Authority to issue these regulations relating to pay disparities would have
expired five years after the effective date of the act.
The proposed substitute directed the Secretary of Homeland Security to
establish procedures consistent with section 7532 of title 5, to provide for the
suspension without pay and removal of employees of the Department when
necessary in the interests of national security or homeland security. These
procedures must have provided for written notice, hearings, and review similar to
that provided in section 7532.
It also required the Secretary of Homeland Security, not later than five years
after the effective date of the act, to submit to Congress a proposal for a
demonstration project to help attain a human resources management system
necessary in the judgment of the Secretary to enable the Department best to carry out
its mission. The proposal would have to ensure that veterans’ preference and
whistleblower protections would be retained, ensure that existing collective
bargaining agreements and rights would remain unaffected, ensure the availability
of such measures as may be necessary to allow the Department to recruit and retain
8See 148 Cong. Rec. H5813-5817 (daily ed. July 26, 2002) for the text and debate
on the Waxman-Frost amendment.

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the best persons possible to carry out its mission, include one or more performance
appraisal systems, and contain recommendations for such legislation or other actions
by Congress as the Secretary considers necessary.
Merit system principles under section 2301 of title 5 would have to apply to all
authorities to issue regulations regarding inequitable pay disparities and suspension
and removal in the exercise of national security and to all personnel management
flexibilities and authorities proposed pursuant to the demonstration project proposal.
Title 5 section 7211 “Employees’ Right to Petition Congress,” which prohibits
interference with or denial of the right of employees, individually or collectively, to
petition Congress or a Member of Congress, or to furnish information to either House
of Congress, to a committee, or member thereof, would be amended to permit an
employee aggrieved by a violation of this right to file a civil action in a district court
within three years after the date of any violation. The action could be brought against
any agency or other person responsible for the violation for lost wages and benefits,
reinstatement, costs and attorney fees, compensatory damages, and equitable,
injunctive, or other relief that the court considers appropriate. The party bringing the
action may request a jury trial.
The proposed substitute provided that nothing in it should constitute authority
to reduce the rate of basic pay (including any comparability pay) payable to any
employee transferred to the Department of Homeland Security below the rate last
payable to the employee before the date of transfer.
It also amended section 812(e)(1) of H.R. 5005, as reported from the House
Select Committee on Homeland Security, relating to employment provisions in the
section relating to savings provisions. A savings provision relating to employment,
section 812(e)(1), as reported by the Select Committee, in relevant part, authorizes
the Secretary of Homeland Security, in regulations prescribed jointly with the
Director of the Office of Personnel Management to “...adopt the rules, procedures,
terms, and conditions, established by statute, rule, or regulation before the effective
date of this act, relating to employment in any agency transferred to the Department
pursuant to this act.”
The proposed substitute struck the word “act” at the end of section 812(e)(1),
and replaced it with “...act, except that the rules, procedures, terms, and conditions
relating to employment in the Transportation Security Administration, before the
effective date of this act may be applied only to the personnel employed by or
carrying out the functions of the Transportation Security Administration.” The
purpose of this substitute appears to have been to prevent the Secretary of Homeland
Security from extending the rules, procedures, terms, and conditions relating to
employment at the Transportation Security Administration, which has statutory
authority to waive some title 5 provisions, to other entities that are scheduled for
transfer to the Department.
During the debate Representative Waxman explained that the proposed
substitute included language that was reported unanimously by the Committee on
Government Reform and Oversight when it considered H.R. 5005. He asserted that
it was “wrong” to allow the Secretary of Homeland Security to waive title 5 chapters

CRS-25
43 “Performance Appraisal,” 51 “Classification,” 53 “Pay Rates and Systems,” 71
“Labor-Management and Employee Relations,” 75 “Adverse Actions,” and 77
“Appeals.” “Civil servants whose responsibilities will be the same today if they are
transferred into this new department should not lose their civil service protections
just because that organizational chart may change. ... We need to encourage good
employees, not treat them as second-class citizens.” 148 Cong. Rec. at H5814 and
H5816.
Speaking in opposition, Representative Rob Portman argued that the Waxman-
Frost amendment “...protects the antiquated civil service system that blunts this
Department’s ability to modernize, to consolidate, to streamline, to bring together 22
different personnel systems into one team.” Id. at H5816. He asserted that it
“...would prohibit the Secretary from using innovative compensation like incentive
pay. ... keeps the new agency stuck in the mud of over 100 pay grades [15 grades
with 10 steps per grade], arcane classifications that make no sense whatsoever, and
performance appraisals that are indifferent to the mission of this agency.” Id.
Representative Portman also argued that, under normal civil service rules which
involve such things as developing a written job description, classifying a position,
conducting job analysis, announcing a position, rating and ranking applicants, as
well as referring the top three applicants for interviews and interviewing them, hiring
a bioterrorism expert conceivably could take up to five months. Id. “Also, the
Secretary could have a bureaucratic nightmare trying to decide who is a terrorism
risk. If you want to fire somebody under the current rules, it can take, yes, weeks
and months. Red tape comes first; homeland security comes second.” Id. He added
that the Waxman-Frost amendment did not allow the Secretary to develop a new
system, but only to propose one to Congress, which would have to work its will on
the proposal by full legislative proceedings of committee and floor action in the
House and Senate. Id.
The Waxman-Frost amendment was rejected by a recorded vote of 208 to 220.
Id. at H5837.
Lieberman Substitute to H.R. 5005 in Senate,
On July 25, 2002, the Senate Committee on Governmental Affairs agreed to
language in the form of a substitute offered by Chairman Joseph Lieberman to the
bill that passed the House. On August 1, 2002, Amendment No. 4467 was filed in the
Senate in the nature of a substitute to H.R. 5005.9 It contained some human resource
management provisions relating to the Department of Homeland Security, as well as
some amendments to title 5 of the United States Code that are intended to apply to
the entire civil service. A Senate bill, S. 2452, 107th Congress, 2d Session, had been
9Amendment No. 4467 is printed in 148 Cong. Rec.S7967-S8003 (daily ed. Aug. 1, 2002,
pt. II).

CRS-26
reported to the Senate by the Committee on Governmental Affairs on June 24,
2002.10
Department of Homeland Security Provisions. Section 101 of the
Lieberman substitute establishes the Department of Homeland Security and places
it in section 101 of title 5, which lists the executive departments. Section 102
provides that the Secretary of Homeland Security shall be the head of the
Department. Section 104 establishes the Under Secretary for Management, an
official to whom the Secretary may assign, among other things, functions relating to
the management and administration of the Department including human resources
and personnel. Section 112 establishes the Chief Human Capital Officer who is
required, among other things, to oversee the implementation of laws, rules, and
regulations of the President and Office of Personnel Management governing the civil
service within the Department.
Section 114 of the Lieberman substitute amends section 5312 of title 5 to place
the Secretary of Homeland Security in level I of the Executive Schedule ($160,700
as of January of 2002) and section 5315 of title 5 to place the Under Secretary for
Management in level IV of the Executive Schedule ($130,000 as of January of 2002).
Section 114 does not place the Chief Human Capital Officer in any level of the
Executive Schedule.
Paragraph (2) “Terms and Conditions of Employment” of section 187(f), a
savings provision of the Lieberman substitute amendment to S. 2452, states that,
“The transfer of an employee to the Department under this act shall not alter the
terms and conditions of employment, including compensation, of any employee so
transferred.”
Paragraph (3) “Conditions and Criteria for Appointment” of section 187(f)
provides that:
Any qualifications, conditions, or criteria required by law
for appointments to a position in an agency, or subdivision
thereof, transferred to the Department under this title, including
a requirement that an appointment be made with the advice and
consent of the Senate, shall continue to apply with respect to any
appointment to the position made after such transfer to the
Department has occurred.
Section 185 “Implementation Progress Reports and Legislative
Recommendations” directs the Secretary of Homeland Security, in consultation with
the President, to prepare semiannual implementation progress reports and submit
them to the President of the Senate and the Speaker of the House for referral to
appropriate committees. These reports must contain, among other things, with
respect to human capital planning, a description of the workforce planning
undertaken for the Department of Homeland Security including an inventory of skills
and competencies available to the Department, the past and anticipated future record
10S. Rep. No. 175, 107th Cong., 2d Sess. (2002).

CRS-27
with respect to recruiting and retaining personnel, plans or progress reports on
utilizing existing personnel flexibility provided by law or Office of Personnel
Management regulations, any inequitable disparities in pay or other terms or
conditions of employment resulting from consolidations, and efforts to address these
disparities using existing personnel flexibility.
Governmentwide Federal Workforce Improvement Provisions.
Division C of the Lieberman substitute amendment to H.R. 2482, entitled “Federal
Workforce Improvement,” contains titles XXI through XXV and incorporates some
provisions that had been introduced by Senator George V. Voinovich in S. 2651,
107th Cong. 2d Sess.11 Title XXI “Agency Chief Human Capital Officers” establishes
a new chapter 14 “Agency Chief Human Capital Officers” to title 5 of the United
States Code, which directs the heads of several agencies to appoint or designate Chief
Human Capital Officers and prescribes their duties.
Title XXII “Reforms Related to Federal Human Capital Management,”amends
section 1115 of title 31 of the United States Code, to require including information
relating to human capital in agency performance plans. It also amends United States
Code title 5, section 3304(a) “Competitive service; examinations” to authorize
agencies to appoint, without regard to sections 3309 through 3318 of title 5,
candidates directly to positions if public notice has been given and the Office of
Personnel Management has determined that a severe shortage of candidates exists or
there is a critical hiring need.
A new section 3319 “Alternative ranking and selection procedures” is added to
title 5 to authorize the Office of Personnel Management or an agency which has been
delegated examining authority the option of establishing category rating systems for
evaluating candidates in the competitive service under two or more quality categories
based on merit consistent with regulations prescribed by the Office. Category rating
systems could be used as an alternative to the current system of assigning applicants
individual numerical ratings. Veterans’ preference rights would be respected.
Title XXII also adds a new subchapter II “Voluntary Separation Incentive
Payments” to title 5, chapter 35 “Retention Preference, Restoration, and
Reemployment” permanently to extend, revise, and expand authorities for using
voluntary separation incentive pay and voluntary early retirement. It also amends
sections 8336 and 8414 of title 5, the immediate retirement provisions of the Civil
Service Retirement System and the Federal Employees Retirement System,
respectively, to extend eligibility for immediate retirement. The sense of Congress
is expressed that implementing voluntary separation incentive payment authority is
intended to reshape the federal workforce, not downsize it.
11See (name redacted),
Homeland Security:Human Resources Management,
Congressional Research Service Report RL31500 for a discussion of these federal workforce
improvement provisions, and (name redacted)
, (name redacted),
Richard A. Best, Jr.,
and Patrick J. Purcell, Congressional Research Service Report RL 31518, Federal
Workforce Improvement Act of 2002: S.2651 for a discussion of the Voinovich bill from
which many of these provisions were derived.

CRS-28
Section 7905(a)(1) of title 5 “Programs to encourage commuting by means other
than single-occupancy motor vehicles” is amended to extend eligibility for a transit
subsidy to a student who provides voluntary services.
Title XXIII of the Lieberman substitute amendment to S. 2452 repeals title 5,
section 3393a “Recertification,” which requires recertifying career appointees in the
senior executive service every three years, and makes conforming changes to other
provisions of title 5. It also amends title 5 section 5307 ”Limitation on certain
payments,” which limits total cash compensation, including total basic pay,
allowances, differentials, awards, and bonuses, to the basic pay for level I of the
Executive Schedule, $166,700 as of January of 2002. The amendment provides that
notwithstanding this cap, the total cash compensation to some categories of
employees including administrative law judges, those in senior level positions
classified above GS-15 and scientific and professional positions, and senior
executives shall not exceed the total annual compensation payable to the Vice
President under section 104 of title 3, $192,600 as of January of 2002.
Title XXIV of the Lieberman substitute amendment replaces title 5 section 4107
“Restriction on degree training,” which generally prohibits agencies from paying or
reimbursing the costs of academic degree training, with a new section 4107
“Academic degree training,” to permit them to pay or reimburse such costs under
certain circumstances. It also modifies the national security education program and
amends section 1902 of title 50, United States Code, to expand the opportunities to
fulfill a service requirement if national security positions are unavailable.
Title XXIV also adds a new section 5550b “Compensatory time off for travel”
to subchapter V of chapter 55 of the United States Code, to grant one hour of
compensatory time off for each hour spent by an employee in travel status away from
an official duty station to the extent that the time spent in travel status is not
otherwise compensable.
Veto Recommendation to Personnel Provisions in Lieberman
Substitute. In an August 1, 2002 letter, the Homeland Security Advisor to the
President, wrote that after reviewing the Lieberman substitute amendment, the Bush
Administration believes that it would create a “cumbersome bureaucracy that would
not provide the best security for America.” He added that, “If the legislation were to
come to the President in its current form, I would recommend a veto to the
President.”
The Ridge letter and accompanying materials expressed concern about a number
of areas, one of which relates to personnel flexibility. The letter stated that:
The President believes that the Department of Homeland
Security should have a modern, efficient, and fair personnel
system that will maximize every employee’s ability to
accomplish the mission of securing the homeland. The
President also believes that this system must maintain vital
employee rights, such as whistleblower and civil rights
protection.

CRS-29
S. 2452 [which, among other things, provides that, “The
transfer of an employee of the Department under this act shall
not alter the terms and conditions of employment, including
compensation, of any employee so transferred” in section
187(f)] fails to strike a reasonable balance in the area of
personnel flexibility. It contains a rigid, statutorily mandated,
and unalterable personnel system that fails to recognize the need
to build a department that is capable of responding to an
adaptable terrorist enemy. The bill would deny the Secretary of
Homeland Security the ability to integrate and modernize
twenty-two different personnel systems that will be combined
into the new Department. Additionally, it would prohibit the
kind of managerial innovation needed to hire and retain
qualified individuals, or to hold them accountable for
accomplishing critical homeland security functions.
Letter from the Honorable Tom Ridge, Homeland Security Advisor to the President,
to the Honorable Thomas Daschle, Majority Leader of the Senate (Aug. 1, 2002).
The executive summary that accompanied the letter said that:
What the President is Asking for...
With its critical mission, the new Department of Homeland
Security must be the most modern, efficient, and flexible in the
federal government. The President wants to put the right people
in the right jobs at the right pay–and to hold them accountable
for their performance. The President also wants to give the new
Secretary the authority to reorganize and quickly shift resources
to meet new terrorist threats. The President wants to empower
the new Department to:
–hire the best possible employees to protect America;
–transfer a percentage of the Department’s funds from
one division to another to respond immediately to
new threat information;
–provide merit-based pay increases to employees who
do an especially good job in their posts;
–quickly move anti-terrorist personnel and resources
to respond to the latest threat information;
–hold employees accountable for their performance,
while retaining longstanding worker rights and
protections that are embedded in the national’s civil
service laws;

CRS-30
–remove poor performers who, because of their poor
performance, jeopardize America’s national security;
–reorganize and consolidate the current confusing
patchwork of homeland security activities into a more
efficient and effective system of protecting America.
The Senate Bill Lacks These Critical Authorities
These existing authorities are currently in use in other parts
of the federal government and should be applied to the new
Department. Yet, the homeland security bill passed out of the
Senate Governmental Affairs Committee would handcuff the
Secretary of Homeland Security by denying he or she the tools
needed to build and maintain a Department capable of meeting
the constantly changing threats of terrorism. Protecting the
homeland is simply too important not to give the Department
this authority.
. . .
The Senate bill does not provide flexibility to attract, hire, and
reward good perfomers, or to hold poor performers acountable:
–The Office of Personnel Management (OPM) reports
that it can sometimes take 5 months or more to hire a
new federal employee and 18 months to terminate
federal employees who are not getting the job done.
–Current federal civil service rules do not allow
managers to reward effective employees and penalize
poor performers. This means that all employees are
given the same annual pay increase based on how
long they have worked for the government, not how
effective they have been at their job.
–INS [the Immigration and Naturalization Service]
currently is unable to shift border patrol agents from
one region to another at a moment’s notice. So, if
intelligence indicates that terrorists may attempt to
enter America through a particular border location,
managers are currently prevented from quickly
moving agents to the vulnerable area–even for a
temporary 30 day assignment.
–Under current rules, if an employee is found
intoxicated at his security post, that employee must be
given a 30 day notice before he or she can be

CRS-31
terminated. And the employee is paid for his 30 day
period.
–The President is asking for less management
authority than Members of Congress have over their
staffs.
The Rules That Protect Federal Workers...
Federal workers represent the very best of America and
deserve strong civil service protections. Under the President’s
plan, employees of the new Department will continue to be
protected by important civil service laws, rules, and regulations
that protect them against discrimination on the basis of age,
disability, race, color, religion, sex, national origin, marital
status or political affiliation, and guarantee existing veterans’
preference and whistleblower protections. The employees being
transferred to the new Department that are represented by
unions–approximately 25% will–retain their union membership
and their collective bargaining rights. Employees will also be
protected by:
--Fair Labor Standards Act
--Equal Employment Opportunity Commission
(EEOC) regulations

--Social Security Act
--Civil Rights Act
--Hatch Act
--Government ethics standards
Executive Summary accompanying Ridge Letter (Underline in original.)
Other material that accompanied the Ridge letter characterized the Senate
committee reported draft as follows:
The Committee introduces narrow changes to the personnel
system–such as slight hiring process reforms and correction to
pay administration anomalies. It provides that no one as a result
of transferring to the new department can be fired or receive
reduced compensation and terms and conditions of job duties
cannot be altered.
Material accompanying Ridge letter at 12.
It identified the following problems with this draft:

CRS-32
–The Senate bill does not provide sufficient flexibility to attract,
hire, and reward good performers, or to hold poor performers
accountable.
–Although the Committee’s bill provides some improvements
in the federal hiring process, it falls short of providing
flexibilities necessary to hire, compensate, and remove
employees when necessary.
–The Department is restricted in how it can use the [voluntary
separation] incentive authority. Payments can be made only for
substantial delay[er]ing, reorganization, reductions in force,
transfer of functions, or workforce restructuring. The use of the
word “substantial” limits the use of this authority.
–Other substantial problems in the federal pay system–like the
inability to harmonize the pay systems coming into the new
Department, or the inability to substantially reward line
employees–are not addressed in the committee reported draft.
Id.
Conclusion
This report has discussed civil service provisions in bills to create a Department
of Homeland Security, H.R. 5005, as passed by the House, and the Lieberman
substitute to H.R. 5005 agreed to by the Committee on Governmental Affairs and
filed as an amendment in the Senate. The House bill authorizes the Secretary of
Homeland Security, in regulations prescribed jointly with the Director of the Office
of Personnel Management, to establish, and from time to time adjust, a human
resources management system for some or all of the organizational units of the
Department of Homeland Security. Chapters of title 5 of the United States Code
which relate to Performance Appraisal, Classification, Pay Rates and Systems,
Labor-Management and Employee Relations, Adverse Actions, and Appeals would
be eligible for adjustment. Authority to establish and adjust the human resources
management system is scheduled to expire five years after enactment.
The Lieberman substitute generally continues all provisions of current civil
service laws for the Department, but alters some provisions for the entire government
that relate to evaluating and appointing applicants for federal employment and
compensating some employees.
The Homeland Security Advisor to the President has indicated that if the
Lieberman substitute amendment in its current form should be presented to the
President for signature, he would recommend a veto because, among other things, it
does not provide the personnel flexibility that the President believes he needs to
protect the homeland against terrorist threats.

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