Alternatives to the Current Method of Computing General Schedule Pay

FPCD-81-60: Published: Aug 26, 1981. Publicly Released: Sep 8, 1981.

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GAO was asked to determine the costs that could be saved if the method of compensating General Schedule employees was based on the actual work hours in a calendar year. Currently, General Schedule employees' annual salaries are based on 2,080 hours, or 260 workdays, even though there are usually one or two additional workdays in a calendar year for which employees are also paid.

GAO identified two feasible alternatives to compensate employees on the basis of either actual or average work hours in a calendar year. Using either method would reduce Government costs by approximately $120 million annually. The present General Schedule pay administration procedures result in a paycheck for an additional pay period in the eleventh or twelfth year of a 28-year cycle. Two alternative methods are available which would better reflect the actual number of workdays in a year and would not substantially alter the present pay administration procedures or change the 26 biweekly pay system. The annual salary could be divided by the actual work hours in each year to compute employees' hourly rates, or 2,087 work hours every year could be used as the divisor to determine hourly rates which would be more precise than the current method because it represents the average number of work hours over the 28-year calendar cycle. The decrease in payroll costs would reduce the Government contribution for retirement. Changing the present method of computation to either alternative is a matter for Congress to decide. Such a change could have a negative effect on employee morale, especially in view of the fact that General Schedule employees have not received full comparability increases in recent years.

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