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: https://www.federalregister.gov/documents/2000/12/19/00-31710/opm-criteria-for-irs-broadbanding-system

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

The Human Capital Officer is the executive responsible for:

The Policy Office is responsible for:

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

The HCO Talent Acquisition (TA), Position Management/Classification (PM/C) Office has overall responsibility for administering the PM/C program Servicewide, including positions covered under the IRS Payband System.

This IRM provides policy guidance for the IRS Payband System. The Policy Office gauges the 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 Policy Office develops and deploys policies, materials, and programs to increase Servicewide awareness and understanding of the IRS Payband System. The Policy Office 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 structure containing one or more GS grades and related ranges of pay. The rate range of a payband is defined by the minimum rate of pay and the maximum rate of pay for that band.

Broadbanding system - A system for grouping positions for pay, job evaluation and other purposes, established under 5 USC Chapter 95, Personnel Flexibilities Relating to the Internal Revenue Service, and outlined by OPM criteria. This differs from the GS system established under 5 USC Chapter 51, Classification, and 5 USC Chapter 53, subchapter III, General Schedule Pay Rates, as a result of combining the grades and related ranges of pay for one or more occupational series.

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 and rate of basic pay for pay setting purposes, before the employee leaves a position covered by the IRS Payband System.

Department Manager(DM) - Second-level supervisory/managerial positions located in IRS campuses (service centers). Previously classified at the GS-11, GS-12, and GS- 13 grade levels, designated by IR payband code IR-02.

Frontline Manager (FM) - All supervisory/managerial positions not covered under the Senior Manager (SM) or DM Payband. Previously classified at the GS-5 through GS- 15 grade levels. The FM Payband consists of 11 single grade bands, designated by IR payband codes IR-03 through IR-13.

General Schedule or GS - The classification and pay system established under 5 USC Chapter 51, Classification, and 5 USC Chapter 53, subchapter III, General Schedule Pay Rates.

IR - The designation for the IRS Payband System pay plan similar to GS as the designation for General Schedule pay plan. Employees covered by the IRS Payband System are referred to as IR employees or managers.

IRS Payband System - The performance based classification and pay system that covers all IRS managers excluding executives.

Locality rate - A rate of pay authorized under 5 USC 5304, Locality-based comparability payments, calculated as a percentage determined by the President for the locality pay area in which the employee’s official duty station is located. It is added to the employee’s underlying rate of basic pay to determine the employee’s locality rate of pay.

Management Selection Program (MSP) - The internal competitive process used in the selection of all temporary or permanent managers (except executives) within IRS.

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 GS annual pay adjustment, within-grade increase, and quality step increase. The PBI is effective on the same date as the GS annual pay adjustment, which is generally effective the first full pay period (PP) in January.

Performance bonus - A lump-sum cash payment based on an annual summary evaluation. A performance bonus is not considered part of basic pay for any purposes.

Senior Executive Service Candidate Development Program (SES CDP) - Is an OPM approved development program and one of the IRS’s succession planning tools used to identify and prepare aspiring leaders.

Senior Manager (SM) - First-level supervisory/managerial positions that report directly to a member of the SES and second-level supervisory/managerial positions. Previously classified at the GS-14 and GS-15 grade level, designated by IR payband code IR-01,

Underlying rate, underlying rate of basic pay, IR underlying rate, or IR underlying rate of basic pay - A rate of pay which excludes locality rates and staffing supplements, also referred to as base pay.

IRS Source, Employee Resources, Pay, Pay Systems, Salary Tables and Pay Administration, IRS Payband System page at: https://irsgov.sharepoint.com/:u:/r/sites/EmployeeResources/SitePages/Pay23.aspx.

IRS Source, Employees Resources, Career Opportunities, Management Selection Process page at: https://irsgov.sharepoint.com/sites/EmployeeResources/SitePages/Management-Selection-Process.aspx.

Payband Resource Center at: http://hco.web.irs.gov/apps/payband/index.htm.

IRM 6.300.1, Employment (General).

IRM 6.335.1, IRS Merit Promotion Plan and Internal Placement.

IRM 6.338.1, Qualification Requirements.

IRM 6.430.3, Performance Management Program for Evaluating Managers, Management Officials and Confidential Management/Program Analysts.

IRM 6.451.1, Employee Performance and Utilization - Awards and Recognition.

IRM 6.530.1, Aggregate Limitations on Pay and Special Rate Schedules.

IRM 6.531.1, Pay Under the General Schedule and IRS Payband System.

IRM 6.536.1, IRS Grade/Band and Pay Retention.

The minimum and maximum IR underlying rates of basic pay for the IR 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, Annual adjustments to pay schedules.

The minimum and maximum locality rates of pay for the IR paybands are adjusted annually and at the same time and in the same manner as adjustments in the corresponding minimum and maximum GS locality rates of pay authorized under 5 USC 5304, Locality-based comparability payments.

An IR employee’s underlying rate of basic pay may not fall below the minimum rate 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 provisions referenced above, the minimum and maximum underlying rates of basic pay of the IR paybands will not be adjusted.

Annually, each business unit will review the summary evaluations of managers 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 Commissioner (head of office) is responsible for ensuring that there is no conflict of interest, or appearance thereof, in the composition of an 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 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, establish baselines and identify trends, resolve evident anomalies, and ensure the ratings accurately reflect the achievement of Servicewide goals.

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 they:

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 GS 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 summary evaluation rating of less than a “Met” will not receive a PBI. Employees with a summary evaluation rating of less than a “Met” will receive an increase equivalent to the GS annual base pay adjustment.

The amount of a PBI may not cause an IR employee’s 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 for IR performance bonuses can be found in IRM 6.451.1, Employee Performance and Utilization - Awards and Recognition.

For detailed pay administration on the IR payband, refer to IRM 6.531.1, Pay Under the General Schedule and IRS Payband System.

When an employee covered by the IRS Payband System moves voluntarily or involuntarily to a GS position, the IR employee’s Payband and pay rate must be converted to a GS-equivalent grade and rate of pay before the employee moves out of the system, as outlined in Appendix C of the OPM Criteria for IRS Broadbanding Systems. This is commonly referred to as the conversion-out process.

The GS-equivalent grade and rate must be determined and used in applying various pay administration rules that govern how pay is set in the GS pay system.

For detailed information on movement out of the IR payband, refer to IRM 6.531.1, Pay Under the General Schedule and IRS Payband System.

An employee’s eligibility for grade or band and pay retention will be determined using the criteria for grade and pay retention stated in 5 USC Chapter 53, subchapter VI, and 5 CFR 536, as modified by the OPM Criteria for IRS Broadbanding System.

For the detailed pay administration of this section, refer to IRM 6.536.1, IRS Grade/Band and Pay Retention.

Performance based increases are effective at the same time as the annual adjustment to the GS rate effected under 5 USC 5303 (that is, the first day of the first full pay period beginning on or after January 1 of the calendar year).

Payment of performance bonuses will be dispersed as soon as practicable after all summary evaluation ratings have been finalized. Summary evaluation ratings and performance bonuses awarded must be determined in a timely manner and forwarded by the appropriate Business Based Human Resource (BBHR) Offices for review and processing.

The BBHR offices will be responsible for reviewing the increases for managers within their organizations and for advising the affected manager's personnel processing office to prepare a Standard Form 52, Request for Personnel Action, reflecting the manager's rate of basic pay for the next year.

The minimum and maximum rates of the locality rates of pay for the IR paybands are adjusted annually and at the same time and in the same manner as adjustments are made in the corresponding minimum and maximum locality rates of pay authorized by 5 USC 5304.

The funding previously used to support the annual adjustment to the GS rate under 5 USC 5303, within-grade increases, and quality step increases, as well as funding from other personnel sources will support the base pay portion of the PBIs.

Funding previously available for performance awards will be used to support performance bonuses.

Funding for the IRS Payband System will be administered at the Servicewide level.