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Pay-Related Legislative Changes in the National Defense Authorization Act, FY 2014

Monday, February 10, 2014
CPM 2014-04
Heads Of Executive Departments And Agencies
Katherine Archuleta Director
Pay-Related Legislative Changes in the National Defense Authorization Act, FY 2014

This is to inform you of three legislative extensions affecting Federal employee pay and certain benefits.  The changes resulting from the enactment of the National Defense Authorization Act (NDAA) for Fiscal Year 2014 (Public Law 113-66, December 26, 2013) (“the Act”) are summarized below. 

Section 611 – Reserve Income Replacement Program

Section 611(8) amends 37 U.S.C. 910(g) to extend the expiration date for the Reserve Income Replacement Program from December 31, 2013, to December 31, 2014.

The Reserve Income Replacement Program is administered by the Department of Defense (DOD) and provides income replacement payments for certain reserve component members experiencing extended and frequent mobilization for active duty service.  (This amendment does not affect the reservist differential authority under 5 U.S.C. 5538, which is a separate program for Federal employees.  A Federal employee who is entitled to a reservist differential may not receive payments under 37 U.S.C. 910 for the same period.  Additional information on reservist differential is found at

Section 1101 – 1-Year Extension of Authority to Waive Pay Limitations for Certain Federal Civilian Employees Working Overseas

Effective January 1, 2014, section 1101 extends to calendar year 2014 the authority provided in section 1101 of the Duncan Hunter National Defense Authorization Act for Fiscal Year 2009 (Public Law 110-417, October 14, 2008), as amended, for the head of an agency to waive the normally applicable premium pay cap established in 5 U.S.C. 5547.  This waiver authority in 2014 applies to certain civilian employees who perform qualifying work while in an overseas location that (1) is in the area of responsibility of the United States Central Command (CENTCOM) or (2) was formerly in the CENTCOM area of responsibility but has been moved to the area of responsibility of the Commander of the United States Africa Command (AFRICOM). Based on the operation of current law, the annual limitation on basic pay and premium pay allowed under the waiver authority in calendar year 2014 will increase to $233,000 which is the annual salary rate for the Vice President in 2014 under 3 U.S.C. 104.

Section 1101(d) of Public Law 110-417 continues to provide the Director of OPM with the discretion to issue regulations for this waiver authority.  OPM does not currently plan to issue regulations.  However, each agency should establish policies for using this waiver authority if it has covered employees.  To ensure agencies apply this discretionary authority consistently, we have developed the attached summary of key elements agencies should include in their policies implementing the waiver authority.  The attached summary includes additional information on employee coverage, approval criteria, and special instructions on applying the waiver authority to employees working in Iraq.

Section 1102 – 1-Year Extension of Discretionary Authority to Grant Allowances, Benefits, and Gratuities to Personnel on Official Duty in a Combat Zone 

Section 1102 amends section 1603(a)(2) of the Emergency Supplemental Appropriations Act for Defense, the Global War on Terror, and Hurricane Recovery, 2006 (Public Law 109-234, June 15, 2006), as added by section 1102 of the Duncan Hunter National Defense Authorization Act (NDAA) for FY 2009 (Public Law 110-417, October 14, 2008) and amended by section 1112 of the NDAA for FY 2012 (Public Law 112-81, December 31, 2011) and section 1104 of the NDAA for FY 2013 (Public Law 112-239, January 2, 2013).  Section 1102 grants the head of an agency the discretionary authority until the end of fiscal year 2015 (i.e., September 30, 2015), to provide an individual employed by, or assigned or detailed to, such agency, allowances, benefits, and gratuities comparable to those provided by the Secretary of State to members of the Foreign Service under section 413 and chapter 9 of title I of the Foreign Service Act of 1980. The employee must be on official duty in Pakistan or a combat zone, as defined by section 112(c) of the Internal Revenue Code of 1986. 

Additional Information

Agency headquarters-level human resources offices may contact OPM at Employees should contact their agency human resources office for further information on this memo. 

cc:  Chief Human Capital Officers

      Human Resources Directors