Sec. 201. Increased pay cap for directors of medical centers and Veterans Integrated Service Networks of Department of Veterans Affairs

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Subchapter III of chapter 74 of title 38, United States Code, is amended by adding at the end the following new section: The Secretary shall prescribe a performance management and awards system for employees appointed under section 7401(4) of this title that ensures performance ratings and awards meaningfully differentiate extraordinary from satisfactory contributions and substantively reflect organizational achievements over which the employee has responsibility and control.

The annual amount of the market rate of pay for an employee appointed under section 7401(4) of this title— shall be determined by the Secretary on a case-by-case basis; and shall take into account— the level of experience of the employee in managing facilities or programs of the Department or other similar agencies or companies, whether governmental or nongovernmental; the complexity of the assignment of the employee, whether assigned or to be assigned; the labor market for individuals in similar positions, which may cover any geographic area the Secretary considers appropriate; the experience of the employee in performing the assignment of the employee, whether assigned or to be assigned; and such other considerations as the Secretary considers appropriate.

Market rate of pay provided under this subsection shall reflect the recruitment and retention needs of the Department for the assignment of a particular director in a facility or network of the Department. The market rate of pay provided under this subsection shall be evaluated by the Secretary not less frequently than once every two years. The market rate of pay of an employee may be adjusted as the result of an evaluation under subparagraph (A). An employee whose market rate of pay is evaluated under subparagraph

(A)shall receive written notice of the results of such evaluation. Not less frequently than once every two years, the Secretary shall prescribe for applicability throughout the Department the minimum and maximum amounts for a market rate of pay that may be paid under subsection (b). Amounts prescribed under paragraph

(1)shall be published in the Federal Register and shall take effect not earlier than 60 days after the date of publication. In no case may the total market rate of pay provided under subsection

(b)exceed the amount of annual compensation (excluding expenses) specified in section 102 of title 3. No adjustment of the market rate of pay under subsection (b)(3)(B) may result in a reduction of the amount of the market rate of pay of a director while in the same position or assignment at the same location. Pay under subsection

(b)shall be considered pay for all purposes, including retirement benefits under chapters 83 and 84 of title 5 and other benefits. An individual receiving pay under subsection

(b)may not receive a cost-of-living allowance under section 5941 of title 5. Not later than one year after the date of the VA Workforce Improvement, Support, and Expansion

(WISE)Act of 2022 , and annually thereafter, the Secretary shall submit to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans’ Affairs of the House of Representatives a report on the implementation by the Secretary of the requirements under this section. . The table of sections at the beginning of such subchapter is amended by inserting after the item relating to section 7433 the following new item: 7434. Pay for directors of medical centers and directors of Veterans Integrated Service Networks. . Section 7404(a)(1) of title 38, United States Code, is amended— in subparagraph (A)— by striking

(A)The annual and inserting The annual ; and by striking and 7401(4) ; and by striking subparagraph (B).