Federal Pay Management Act of 1986

Federal Pay Management Act of 1986 - Title I: Alternative Compensation Programs - Establishes a Federal Compensation Board to design and implement Federal employee compensation programs utilizing the alternative systems set forth in this Act and to carry out oversight functions with respect to such programs. Describes the types of alternative systems as follows: (1) a system under which annual pay adjustments are made so that total pay and benefits are comparable to those of private enterprise for the same level of work; (2) a system under which annual pay adjustments are made so that rates of basic pay are consistent with those for the same level of work in private enterprise within the same geographic region; (3) a system under which conditions of employment shall be subject to collective bargaining; (4) a system which identifies separate career categories, adjusts pay based on specified factors, provides pay differentials, and authorizes special awards and performance recognition; and (5) any combination of the aforementioned.

Establishes a Commission on Federal Pay Management to evaluate each alternative system as implemented, and to make similar evaluations with respect to the current system. Requires a report to the President and the Congress at the end of the five-year period beginning on the date of enactment of this Act. Terminates the Commission after submission of the report.

Title II: Amendments Relating to Pay Comparability System - Specifies the methodology to be used in connection with Federal pay adjustments. Revises the method for making such pay adjustments. Provides that mandatory wage and price controls are a basis for submission of an alternative plan to a Federal pay adjustment. Requires the enactment of a joint resolution of approval before any such plan becomes effective.

Title III: Authority for Agencies to Establish Higher Minimum Rates of Basic Pay - Grants to agency heads the authority to establish higher minimum rates of basic pay for certain occupations with recruitment problems. (Currently such authority is granted to the President.) Requires agency heads to notify the Office of Personnel Management before exercising such authority. Provides that any decision of the Office that such action is unwarranted shall be accompanied by a statement of the reasons for such decision. Authorizes the agency head to appeal to the President.