By virtue of the authority vested in me by sections 503, 504, and 505 of the Federal Salary Reform Act of 1962 (Public Law 87-793; 76 Stat. 841-843), and as President of the United States, it is hereby ordered as follows: PART I---GENERAL POLICY SECTION 101. Heads of departments and agencies in the executive branch of the Government are directed: (a) To make full use of the authorities provided by the Federal Salary Reform Act of 1962 and the statutory salary systems to which that Act refers in such a manner as to secure and maintain the high quality of Federal personnel necessary for an effective and efficient overnment service; (b) To use such authorities in such a manner as to (1) motivate employees to perform continuously at their full capacity, and (2) provide fair treatment in pay matters of all employees subject to such statutory salary systems; and (c) To take all appropriate measures to ensure that the Government receives full value for its expenditures for salaries and that every employee is paid no more than is warranted by the nature of his assignments and the degree of competence with which he performs them. PART II---ANNUAL SALARY REVIEW SECTION 201. The Director of the Bureau of the Budget and the Chairman of the Civil Service Commission shall submit to the President, not later than December 31 of each year, a report comparing the rates of salary fixed for Federal employees compensated under the statutes listed in this section with the rates of salary paid for the same levels of work in private enterprise as determined on the basis of the National Survey of Professional, Administrative, Technical, and Clerical Pay conducted by the Bureau of Labor Statistics: (a) The Classification Act of 1949, as amended (5 U.S.C. 1071 et seq. ). (b) Part III of title 39, United States Code, relating to personnel in the postal field service. (c) The Foreign Service Act of 1946, as amended (22 U.S.C. 801 et seq. ). (d) Chapter 73 of title 38, United States Code, relating to personnel of the Department of Medicine and Surgery in the Veterans' Administration. Such report shall contain such recommendations with respect to statutory salary schedules, salary structures, compensation policy, and other related matters, as the Director and the Chairman deem advisable. In preparing such report the Director and the Chairman shall obtain and consider such recommendations as may be made to them by the heads of the agencies employing personnel under any of the statutes listed in (b) , (c) , or (d) , and such recommendations shall be transmitted to the President with such report. SEC. 202. The Director of the Bureau of the Budget and the Chairman of the Civil Service Commission shall (1) provide authorized representatives of such Federal employee organizations as they deem appropriate with (i) the findings of the Bureau of Labor Statistics survey referred to in section 201, and (ii) the methods and results of their comparison of Federal salary schedules with the findings of the Bureau of Labor Statistics; (2) establish suitable means for receiving and considering the views of such employee organizations thereon; and (3) transmit the views of such employee organizations to the President with the report required by section 201. SEC. 203. The heads of the agencies employing personnel under any of the statutes listed in section 201 shall provide such information and technical staff assistance with respect to the statutory salary systems applicable to their agencies as may be requested by the Director of the Bureau of the Budget and the Chairman of the Civil Service Commission, in carrying out the provisions of sections 201 and 202. PART III--SPECIAL RATES FOR RECRUITMENT AND RETENTION SECTION 301. Subject to the provisions of sections 302 and 303, the Civil Service Commission is hereby designated and authorized to exercise the authority conferred upon the President by the provisions of sections 504(a) and 504(b) of the Federal Salary Reform Act of 1962 to establish and revise higher minimum rates of basic compensation (1) for positions compensated under section 603 (b) of the Classification Act of 1949, as amended (5 U.S.C. 1113 (b)), and (2) after consultation with the head of the department or agency concerned, for positions compensated (i) under the provisions of part III of title 39, United States Code, relating to personnel in the postal field service, (ii) the pay scales for physicians, dentists, and nurses in the Department of Medicine and Surgery of the Veterans' Administration under chapter 73 of title 38, United States Code, or (iii) sections 412 and 415 of the Foreign Service Act of 1946, as amended (22 U.S.C. 867 and 870). SEC. 302(a). The Civil Service Commission shall not establish higher rates of compensation under section 504 of the Federal Salary Reform Act of 1962 unless the Commission first determines that the salary rates in private enterprise for one or more occupations in one or more areas or locations are so substantially above the salary rates of statutory pay schedules as to handicap significantly the Government's recruitment or retention of well-qualified personnel. Before so determining, the Commission shall satisfy itself that adequate attention has been given to other relevant factors, such as the conduct of an adequate recruiting program and the improvement of working conditions: Provided, That whenever statistically valid salary data (such as Bureau of Labor Statistics surveys) indicate that salary rates in private enterprise for one or more work levels for an occupation or group of occupations exceed statutory salary rates for the corresponding work levels by at least ten percent in an area or location where the Commission determines that the Government's recruitment or retention of qualified personnel is significantly handicapped, it may conclude without further investigation that such handicap is due to the difference in salary rates rather than to other factors. (b) The Civil Service Commission shall not establish higher rates for all positions in a statutory grade or level in a given area unless the Commission determines that (1) the average of the salary rates in private enterprise for equivalent work levels in such area is at least ten percent above the fourth step rate of such statutory grade or level and (2) adequate recruitment and retention cannot be achieved by establishment of higher rates for certain occupations or groups of occupations. SEC. 303. The Civil Service Commission shall review annually any higher rates of basic compensation established under section 504 of the Federal Salary Reform Act of 1962 and, after consultation with the department or agency concerned in the case of salary systems other than the Classification Act, shall continue, abolish, or revise such special rates in consideration of the current facts and the criteria set forth in section 302. No employee shall have his salary reduced because of a change, pursuant to the provisions of this section, in a minimum or other rate of a grade or level. PART IV--CLASSIFICATION ACT SYSTEM SECTION 401. The Civil Service Commission shall revoke the position classification authority of any department or agency under the Classification Act of 1949, as amended, whenever the Commission finds, in connection with its regular inspections, or otherwise, that any such department or agency has failed to classify its positions in accordance with applicable standards. SEC. 402. The Civil Service Commission shall issue such regulations and standards as may be necessary to ensure that only those employees whose work is of an acceptable level of competence receive step increases under the provisions of section 701 (a) of the Classification Act. SEC. 408(a). Each department and agency in the executive branch of the Government employing personnel under the Classification Act shall establish a plan for granting additional step-increases in recognition of high quality performance under section 702 of that Act.. Such plans shall (1) be as simple as practicable, (2) provide for delegation of authority to an appropriate management level, (8) seek to ensure fairness to all employs, and (4) provide for informing employees, at least annually, of the number of such increases granted in their agencies. (b) The Civil Service Commission shall (1) establish such regulations and standards as it deems appropriate for such agency plans, (2) aid and advise agencies in the formulation and administration of such plans, and (8) inspect such plans and their operation to ensure that such step-increases are granted in a manner that is fair to employees and provides motivation for high quality performance. SEC. 404. The Civil Service Commission, in prescribing regulations for higher rates of pay pursuant to section 808 of the Classification Act for employees having responsibility for supervision of prevailingrate employees, shall give effect to the following: (a) An irregular prevailing rate (such as the saved rate of a prevailing-rate employee not related to his current position) shall not serve to advance the salary rate of a Classification Act supervisor. (b) The relative rate-ranges of a Classification Act supervisor and a prevailing-rate employee supervised by him shall be considered as well as the specific rate either is receiving at a given time. (c) Due consideration shall be .given to equities among supervisors as well as those between a supervisor and a prevailing-rate employee supervised by him. PART V--REPORTS SECTION 501. Each department and agency in the executive branch employing personnel under any of the statutory pay systems listed in section 201 shall submit annually to the Chairman of the Civil Service Commission in such form, at such time, and with such supporting information as the Chairman may prescribe, a report on the operation of that system, together with any recommendations the head of the department or agency may deem advisable. The Director of the Bureau of the Budget and the Chairman of the Civil Service Commission shall prepare and submit to the President, not later than December 31 of each year after 1962, a consolidated report, with recommendations, on the operation of each such system. PART VI--PRIOR ORDER SUPERSEDED SECTION 601(a). Executive Order No. 11056 of October 11, 1962, is hereby superseded. (b) Executive Order No. 10072 of July 29, 1949, as amended, is hereby revoked. JOHN F. KENNEDY
THE WHITE HOUSE, #signature
January 2, 1963
