Section 9509 of 5 U.S. Code (USC), codifies those provisions in the Restructuring and Reform Act of 1998 (RRA ‘98), which authorized the Secretary of the Treasury to establish broadbanding pay and classification systems covering all or any portion of the IRS workforce under the General Schedule (GS) pay system. The IRS Payband System described in this IRM, established by the Secretary, conforms with the criteria defined by OPM in 65 FR 79433, December 19, 2000.

Laws: Title 5, United States Code (USC), Government Organization and Employees, at: https://uscode.house.gov/.

Federal Register Notice: OPM criteria for IRS Broadbanding System, 65 FR 79433, issued December 19, 2000 at: http://hco.web.irs.gov/compbenefits/pdf/OPMIRSCriteria.pdf.

Other: Treasury approved Pay Plans at http://hco.web.irs.gov/apps/payband/index.htm.

The Human Capital Officer is the executive responsible for:

The HCO’s Human Resources Strategy, P&A Division, PLCP Branch is responsible for:

The HCO’s HR Shared Services, Payroll is responsible for providing systems, tools, and all related instructions.

This IRM provides policy guidance for the IRS Payband System. The P&A Division gauges effectiveness of the policy based on feedback from customers and program owners about subjects contained in this IRM. During review and publishing of this IRM, sections are revised, added, or removed based in part on this process.

The P&A Division develops and deploys policies, materials, and programs to increase Servicewide awareness and understanding of the IRS Payband System. The P&A Division collaborates with other HCO organizations and Servicewide stakeholders to support education and outreach activities as they relate to the IRS Payband System.

The following activities help ensure program success:

Annual pay adjustment - the government-wide change to pay schedules provided under 5 USC 5303. This adjustment is usually effective on the first day of the first applicable pay period beginning on or after January 1 of each calendar year.

Band or payband - a pay level or work level within a career path containing one or more GS grades and related ranges of pay.

Base pay, rate of basic pay, underlying rate of basic pay, underlying rate, or IR rate - a rate of pay fixed by law or administrative action for the position held by an employee before any deductions and exclusive of additional pay of any kind, such as locality payments or special rate supplements.

Career path - a grouping of one or more occupational series into broad occupational families or career tracks for job evaluation, pay, or other purposes. A career path may contain one or more bands.

Conversion-out process - The OPM methodology used to determine an employee’s GS-equivalent grade level when the employee leaves a position covered by the IRS Payband System.

General Schedule or GS - the classification and pay system established under 5 USC chapter 51 and subchapter III of chapter 53.

IR - "IR" stands for Internal Revenue. It is the designation for the IRS Payband System just like "GS" is the designation for General Schedule pay system. Employees covered by the IRS Payband System are referred to as IR employees or managers.

Payband or Paybanding System - a system for grouping positions for pay, job evaluation, and other purposes that is different from the GS system established under 5 USC chapter 51 and subchapter III of chapter 53, as a result of combining the grades and related ranges of pay for one or more occupational series.

Performance Based Increase (PBI) - an increase in base pay based on an employee’s performance as measured by their annual summary evaluation. The PBI replaces the annual GS across-the-board increase, within-grade increase, and quality step increase.

HCO website at: http://hco.web.irs.gov/compbenefits/compleave/IRPayband.asp.

HCO, Performance Management website at: http://hco.web.irs.gov/perfmgmt/index.html.

OPM IRS Broadbanding Criteria at: http://hco.web.irs.gov/compbenefits/pdf/OPMIRSCriteria.pdf.

Payband Resource Center at: http://hco.web.irs.gov/apps/payband/index.htm contains information for positions covered under the IRS Payband System, including topic such as pay plans, performance based increases, performance bonuses, salary tables and calculators.

IRM 6.335.1, Promotion and Internal Placement at: http://irm.web.irs.gov/link.aspx?link=6.335.1.

IRM 6.430.3, Performance Management Program for Evaluating Managers, Management Officials and Confidential Management/Program Analysts at: http://irm.web.irs.gov/link.aspx?link=6.430.3.

IRM 6.451.1, Employee Performance and Utilization - Awards and Recognition at: http://irm.web.irs.gov/link.aspx?link=6.451.1.

IRM 6.530.1, Aggregate Limitations on Pay and Special Rate Schedules at: http://irm.web.irs.gov/Part6/Chapter530/Section1/IRM6.530.1.aspx.

IRM 6.531.1, IRS Pay Under the General Schedule and IRS Payband System at http://irm.web.irs.gov/Part6/Chapter531/Section1/IRM6.531.1.aspx.

IRM 6.536.1, IRS Grade/Band and Pay Retention at http://irm.web.irs.gov/Part6/Chapter536/Section1/IRM6.536.1.aspx.

The IRS Payband System has the following compensation elements:

An IR employee will be considered for an increase to base pay and for a performance bonus each year. An IR employee who receives a PBI may also receive a performance bonus in the same year.

The pay of an IR employee will be increased by locality pay authorized under 5 USC 5304.

Employees under the IRS Payband System are subject to the aggregate limitation on pay set forth in 5 USC 5307, 5 CFR 530 Subpart B and IRM 6.530.1.2, Aggregate Limitations on Pay. An employee’s aggregate compensation (includes base pay, locality pay, special rate, premium pay, allowances, differentials, bonuses, incentives, awards, or other similar cash payment under this authority) is limited to the annual rate for Level I of the Executive Schedule in any calendar year. Refer to IRM 6.530.1, Aggregate Limitations on Pay and Special Rate Schedules for additional information.

The minimum and maximum IR underlying rates of basic pay for the IRS Paybands are adjusted annually at the same time and in the same manner as adjustments in the corresponding minimum and maximum GS rates authorized under 5 USC 5303.

The minimum and maximum locality rates of pay for the IRS Paybands are adjusted annually and at the same time and in the same manner as adjustments in the corresponding minimum and maximum locality rates of pay authorized under 5 USC 5304.

An IR employee’s IR underlying rate of basic pay may not fall below the minimum rate of base pay of their payband as a result of the annual rate range adjustment. An IR employee whose IR rate falls below the new IR minimum rate of their payband as a result of the annual rate range adjustment will have their IR rate adjusted by the greater of:

An IR employee whose IR underlying rate of basic pay does not fall below the new minimum rate as a result of the rate range adjustment is eligible for a PBI as described in 6.959.1.4.3, Performance Based Increases.

An IR employee’s underlying rate of basic pay cannot exceed the maximum underlying rate of basic pay of the applicable payband unless covered under IRM 6.536.1, IRS Grade/Band and Pay Retention.

If there is no annual GS pay adjustment under the above provisions, the minimum and maximum underlying rates of basic pay of the IRS Paybands will not be adjusted.

A PBI is an increase to base pay based on an IR employee’s annual summary evaluation rating.

An IR employee is eligible for a PBI when the employee:

The IRS determines the amount of the PBI on an annual basis, expressed as a percentage of base salary. In determining the amount of PBI, the IRS will consider the availability of funds and the annual pay adjustment provided under the GS pay system. The annual funding for the PBI is based on the amounts previously expended for managers’ within-grade increases, quality step increases, and the annual base pay adjustment as provided under the General Schedule pay system.

The amount of a PBI for an “Outstanding” summary evaluation rating will be greater than a PBI for an “Exceeded” summary evaluation rating, and a PBI for an “Exceeded” summary evaluation rating will be greater than a PBI for a “Met” summary evaluation rating. A less than a “Met” summary evaluation rating will not receive a PBI.

The amount of a PBI may not cause an IR employee’s IR underlying rate of basic pay to exceed the payband maximum rate.

A performance bonus is awarded based on the IR employee’s annual summary evaluation rating. An IR employee who earns:

Detailed policy can be found in IRM 6.451.1, Employee Performance and Utilization - Awards and Recognition.

Annually, each business unit will review the summary evaluations of managers on a corporate basis to maintain consistency in the application of the performance management system. Each business unit is responsible for establishing a documented methodology to ensure rating consistency and objectivity. The Division Commissioner, National Taxpayer Advocate, Chief, or Director reporting to The Commissioner and/or Deputy Commissioners (Heads of Office) is responsible for ensuring that there is no conflict of interest, or appearance thereof, in the composition of a SM, DM, or FM Performance Review Board (PRB) or Equivalent and that the performance management system is applied consistently.

For the annual PRB Guidance, refer to the HCO, Performance Management website at: http://hco.web.irs.gov/perfmgmt/index.html or the Payband Resource Center at: http://hco.web.irs.gov/apps/payband/index.htm.

Each business unit will identify trends, resolve evident anomalies, and ensure the summary evaluations accurately reflect the achievement of the business unit’s goals.

Annually, HCO will review the ratings of IR employees on a Servicewide basis to maintain consistency in the application of the performance management system, to establish baselines and identify trends, to resolve evident anomalies, and to ensure the ratings accurately reflect the achievement of Servicewide goals.