Less for the Long Term?

By David McGlinchey

While debate rages across the federal government on the merits and disadvantages of performance pay, a group of employees within the Federal Aviation Administration are unhappy with the details of their pay-for-performance system.

Mark Lash, a manager with the FAA in Oklahoma City, is one of about 70 long-term agency employees who have protested the cap placed on base pay. The FAA implemented a pay-for-performance system in 1996. Under those regulations, employees cannot receive increases in base pay after they reach the top rank of their pay band. The agency gives performance pay awards to these employees though lump-sum payments.

Some employees have complained, however, because the pay cap has affected 829 employees but more than 4,000 FAA workers have been declared exempt. More than 1,000 employees are not affected by the cap because they were grandfathered in - their basic rate of pay already was above the pay-band maximum when the new system was put in place. Almost 3,000 employees are protected from the base-pay cap because they were covered by a negotiated labor agreement.

Lash said the uneven application of the rule is unfair.

"Except for a matter of timing, the current group of 829 employees would have been grandfathered," Lash wrote in an issue paper distributed across the agency in October. "If the current group of 829 employees were members of certain bargaining units, they would be receiving their 'pay-for-performance' awards as permanent adjustments to their base salaries.... timing or membership in a bargaining unit should not be criteria that impacts basic employment benefits."

In his paper, Lash argues that the cap on base pay reduces the level of agency matching contributions to the Thrift Savings Plan retirement account, the amount that employees themselves can contribute to the TSP, locality pay adjustments, and overtime pay. He took the process a step further and calculated the lost income for a 50-year-old FAA employee who makes $75,000 annually. Assuming the employee retires at 55 and lives until 80, the retiree will lose more than $300,000 in total income, he said.

"Loss in salary and retirement benefits will be in the tens and hundreds of thousands of dollars for each of these employees," Lash wrote in his paper. "It seems grossly unfair that this loss can be attributed simply to a matter of timing or membership in certain bargaining units."

Because the pay cap exclusively will affect employees over 40 years old, about 70 employees have filed civil rights complaints with the FAA, according to Lash. He said his complaint is still pending.

"Maybe the policy was not set up to be discriminatory, but in practice it is," Lash said.

The agency declined to comment on unresolved civil rights complaints. An agency spokesman also said that he was unaware of Lash's complaints, despite the fact that several top public affairs officials received the paper in late October. Senior agency officials were not immediately available to discuss the issue.

In e-mails and speeches, FAA Administrator Marion Blakey apparently has acknowledged the disparity. In both forums, however, she has told FAA employees that they generally are paid more than their private sector counterparts, and she asked them to consider the agency's "tight budgets" or "budget situation."

Lash does not seem completely comfortable creating waves. "I don't like doing this," he said. "I've never been a rabble rouser."

But he also indicated that he will see this argument through to the end. For some employees - such as himself - the issue is about the size of a retirement nest egg. For others, however, it is a simple issue of making ends meet.

"Some people cap out at the $35,000 range; it's not just high paid people, it's the full range," he said. "They could fix this in five minutes, but they aren't."