HRDG 4500 - Recruitment and Retention Incentives - Section D

The Superior Qualifications and Special Needs Pay Setting Authority (SQA) is designed to help Agencies compete with the private sector to attract applicants with superior or unique qualifications. SQA is not intended to match a candidate’s existing rate of pay (current salary or competing job offer) rather it is a tool to help USDA attract the best talent while maintaining a fiscal responsibility to offer the most cost effective salary to attract a candidate. Salary alone does not translate into superior qualifications. An SQA must be based on the candidate’s experience, skills, training, and/or Agency need.

SQA and Special Needs Pay Setting Authority allows you to set a new employee's pay at a step above step 1 of the General Schedule, not to exceed step 10 of the grade.

Note: Regulations require that when considering an SQA, agencies must determine whether a recruitment incentive could meet the need instead of using the SQA. If an incentive would meet the need then it must be used in lieu of an SQA.

Superior Qualifications means that a candidate has unusually high, unique or superior qualifications suited for the position in comparison with other qualified candidates and a loss of salary and/or benefits would result if the candidate were to accept employment at step 1 of the grade.

Special Need means a documented need for a specific set of skills and/or expertise where recruitment efforts have had limited success. It means:

• An individual who is singularly suited to a unique Departmental function;
• An individual who has special though not necessarily superior qualifications that meets the needs of a position, or,
• A documented area of chronic labor shortage.

Use this authority for high quality candidates entering the Federal civilian service to fill any GS-1 through GS-15 position (including permanent and temporary positions in the competitive or excepted service):

• Upon initial appointment (new appointment regardless of tenure) or
• Returning to Federal employment after a break in service of 90 calendar days or more (5 CFR 531.212(a)(2)]). ("Federal government" means all entities of the U. S. Government, including the U. S. Postal Service and the Postal Rate Commission and District of Columbia employees hired before 10/01/87.)
• For a reappointment without requiring a 90-day break in service if the candidate’s civilian employment with the Federal government during the 90-day period preceding the new appointment was limited to one or more of the following (5 CFR 531.212[a][3]):
  • Under a time-limited or non-permanent appointment in the competitive or excepted service (including employment under the Pathways Internship Program under 5 CFR 213.3402[a])
  • Under an appointment as an expert or consultant under 5 U.S.C. 3109 and 5 CFR 304,
  • Under a provisional appointment under 5 CFR 316.403.

NOTE: The decision to use this authority must be made prior to making an official offer of employment at a rate above step 1 and the candidate entering on duty. This means that the written justification and forms (AD-3077, MRP Forms 145-R and 147-R, if applicable), must be completed and approved (signed/dated) prior to the official offer of employment being made and the employee entering on duty. Applicants must be advised that any offer made is tentative until the request is approved.

SQA applies to all MRP and FAS journeyman (full performance level [FPL]) / senior level (e.g., such as a branch chief) GS and GM employees covered by 5 U. S. C. 6301(2).

To use this authority for other than journeyman / senior level positions, approval must be obtained from the Director, OHRM. HRO will work on the Program’s behalf to request such approval.

SQA for Federal Wage System (FWS) employees is explained in OPM’s Operating Manual for the FWS. This policy does not cover FWS employees.

The SQA rate:

• Approximates the candidate’s existing rate of pay;
• May not exceed the existing rate of pay by more than 20% including incentives, consulting pay or fringe benefits; and,
• May not exceed step 10 of the grade offered.

(DR 4000-531-002, Section 5, dated 05/27/14)

When determining the rate of pay to offer the applicant it is important to ensure that:

• The initial offer is sufficiently competitive to attract the applicant.
• Equity is maintained between the pay of the new appointee and the current employees performing comparable work within the work unit.
• The decision to offer SQA is based on the candidate’s credentials which are not commonly found in the agency workforce or candidate pool.
• The selected candidate’s competencies clearly exceed those of the other candidates.
• A variety of factors are considered, including, but not limited to exceptional or high level work experience, professional licenses, and post-graduate degrees related to the position being filled when compared to others in the field.

The following factors must be addressed (as applicable) in the written justification.

• Matching Income. Superior qualification by itself is not sufficient to justify an appointment above the minimum. It must be shown that accepting the appointment at step one of the grade would cause the applicant to forfeit existing income or income which he/she is likely to earn.
• Fringe Benefits. Consider fringe benefits if they substantially exceed the government's benefits package. It is not proper to consider fringe benefits that are illegal for the government to provide, e.g., transportation to and from work.
• Cost of Living. Take into account the location where the salary was or would be earned and compare it to the payable rates of basic pay in the same location. Salaries which appear to be the same may be significantly different when differences in the cost of living are included.
• Other Sources of Income. Applicants may have other sources of income, e.g., consulting fees, bonuses, pay increases. Accepting a Federal position may require giving these up usually due to a conflict of interest or scheduling problems.

e. Income from Work on a Less than Full-Time Basis. If an individual does not have a salary but earns income from consulting fees or other work that is less than full-time, you must try to examine the pattern of earnings over several (3-5) years. The existence of one big contract must not necessarily be used to calculate the income that the applicant would be giving up. On the other hand, if he/she can show that this level of income is likely to continue, it must be considered. Steady increases in income may also be taken into account.

You may not:

• Prorate a salary that is earned on a part-time (PT) basis. An annual PT salary must not be divided by the actual hours worked and the resulting hourly rate used to justify a higher rate under this authority. Conversely, an hourly rate must not be projected to annual full time rate to support a higher rate of pay. It must be considered as PT.
• Use the SQA authority to compete with other agencies. For example, if an individual has earned his or her primary income as a Federal consultant under 5 USC 3109, than it would not be permissible to use those earnings to justify an appointment above the minimum.

f. Private Sector Offer

If a candidate has a written private sector offer (dated within the past 30 days) that is substantially higher than his/her recurrent income than this job offer may be considered.

g. No Salary Information. If an applicant:

• Is not currently earning a salary commensurate with his/her qualifications, and
• Does not have a specific job offer in hand but qualifications indicate that the candidate would command a higher salary,

Then you may base the salary offer on the salary that the applicant could reasonably expect to command.

This situation is typical with applicants who have just completed a PhD program or law school and in some instances work for a nonprofit organization. This salary determination must be based on Bureau of Labor Statistics information, salary surveys, and/or current recruitment experiences for similar positions.

h. Other Considerations. In addition to the above factors, you may also consider:

• Budget and policies;
• The rates of pay previously authorized in similar situations;
• The desirability of the geographic location, duties, and/or work environment associated with the position;
• Significant disparities between Federal and nonfederal salaries for the skills needed for the position being filled;
• Existing labor market conditions and employment trends, including the availability and quality of candidates for the same or similar positions; Recent turnover in the same or similar positions;
• The importance/criticality of the position being filled and the effect on the agency if it is not filled or if there is a delay in filling it;
• The desirability of the geographic location, duties, and/or work environment associated with the position;
• Agency workforce needs, as documented in the agency's strategic human capital plan; and/or,
• Any other appropriate factor(s).

Note: When considering military pay remember that it has many facets and may include items such as, longevity, allowances and special pay, e.g., danger pay, scuba pay, military retirement pay. Therefore, it may be necessary to first determine which aspects of the military pay are comparable and necessary for consideration. The following are items that may be included:

• Base Pay – comparable to Federal basic pay
• Basic Allowance for Subsistence (BAS) – subsistence –comparable to cost of living in the Federal sector
• Basic Allowance for Housing (BAH) – comparable to cost of living in the Federal sector
• Save Pay – comparable to pay retention in the Federal sector

Regulations require that when considering an SQA, agencies must determine whether a recruitment incentive could meet the need instead of using the SQA. If an incentive would meet the need then it must be used in lieu of an SQA.

However, in certain situations, the disparity between the employee's current income and the Federal pay scale is so great that both an appointment above the minimum and a recruitment incentive may be deemed necessary. If this is the case then it is important to document both actions thoroughly. For information on the Recruitment Incentive please see HRDG Section E of this subchapter.

Your written justification to pay a starting salary above Step 1 must be based on meeting one of the following criteria:

• The candidate has superior qualifications and would forfeit income to accept the position. Describe how the individual's experience, education, and/or accomplishments are significantly higher than other candidates in the field. The superior qualifications must be relevant to the position being filled and above the qualifications that are minimally required for the position and/or be more specialized when compared to other candidates. The fact that an individual has superior qualifications, by itself, is not sufficient to justify appointment above the minimum. It must be shown that accepting the appointment at the first step of the grade would cause the applicant to forfeit existing income or income which he or she is likely to earn, or
• The candidate fills a special agency need. Describe how the type, level, or quality of the individual's skills, competencies, experience and/or education is essential to accomplishing an important agency mission, goal, program activity or work force need [as documented by the agency's strategic human capital plan].

Note: To justify that a candidate would have to forfeit income to accept the position, you must fill out Form MRP 147-R (112.48 KB), Annual Salary Computation Sheet for Superior Qualifications Appointments. In addition, attach written documentation of the current salary rate or the job offer that is being used to justify a higher salary rate.

Your justification (and/or any attached documentation) must also address:

• The reason(s) for authorizing the higher rate instead of or in addition to a recruitment incentive (see Section E), and
• The recruiting sources used along with a description and results of recent recruitment efforts.

In your justification, remember to identify the factor(s) used from the Pay Rate Determination Factors section above and explain how each directly relates to the step at which pay is set.

Each Agency Administrator is delegated the authority to approve SQAs. This authority has been re-delegated as indicated below:

The authority may not be re-delegated further. (5 CFR 531.212[e], DR 4000-531-002 dtd 05/27/14). Please note that for certain senior level appointments, the following may apply:

To make an SQA, follow this process:

In addition to the record requirements on the Records/Reports Chart in Section A, The HRO also must maintain the following information:

• Employee Name
• Organizational Title
• City, County, State of Official Duty Station
• Appointment Date
• Position Title, Series , Grade & Step
• Annual (Starting) Salary
• Copy of Signed Justification
• Name of Authorizing Official
• Date of Authorization
• Position Title of Authorizing Official
• Nature of action (e.g., career-conditional appointment). (See DR 4030-335-002, Merit Promotion and Internal Placement dated July 22, 2015.)
• Copy of AD-3077
• Copy of MRP 145-R, Superior Qualifications and Special Needs Appointments.
• Copy of the written justification.
• MRP Form XX, SQA - HRO Staffing Review Checklist (14.39 KB), if applicable.
• MRP Form 149, Superior Qualifications and Special Needs Appointment (SQA) Requesting Official’s Checklist (246.66 KB)
• Applicants resume or other form submitted as application for Federal employment.
• A copy of the position description.
• List of recruiting sources used along with a description and results of recent recruitment efforts.
• Copy of Job Opportunity Announcement/Vacancy Announcement.
• Declination of step 1 offer from employee.
• Copy of MRP 147-R (129.42 KB), Annual Salary Computation Sheet for Superior Qualifications Appointments with supporting documentation.

Note: Programs submit above information to the SPO within 60 calendar days.

Records may be destroyed by the SPO three (3) years after the date of approval, upon completion of the service agreement, or upon termination of the incentive or differential payment, whichever is later. Longer retention is permitted if required for business use. (See: DAA-GRS2016-00150011.)