October 2, 2002

FROM: Committee on Standards of Official Conduct
                /s Joel Hefley, Chairman
                /s Howard L. Berman, Ranking Minority Member

SUBJECT: Applicability of the Financial Disclosure Reporting Requirement, the Outside Employment and Earned Income Restrictions, and the Post-Employment Restrictions to House Employees

Historically the last few months of the year are a time when a number of offices consider granting merit adjustments – temporary as well as permanent – in staff pay. Staff members who receive increased pay through an adjustment in their House salary should be aware that – depending on the amount and duration of the increase – they may become subject to the requirement for filing a Financial Disclosure Statement, restrictions on their outside employment and earned income, and post-employment restrictions on lobbying.¹ For example, it is not uncommon for a pay increase that is in effect for the last two months of the year only to result in the staff person being required to file a Financial Disclosure Statement the following spring.

In 2002, the annual salary level that triggers the Financial Disclosure requirement and the outside earned income and employment restrictions is $99,096, and the annual salary level that triggers the post-employment lobbying restrictions for staff is $112,500.² Pay at or above the threshold level will trigger the requirement and restrictions in the following circumstances –

 Financial Disclosure. A House employee whose House salary is at or above an annual rate of $99,096 for 60 days or more in 2002 will be required to file an annual Financial Disclosure Statement for 2002. Thus, for example, compensation at that rate for a period as brief as two months this year will trigger the reporting requirement. The requirement will apply whether or not the months (or the days) at which one is paid at that rate are consecutive.

The annual Financial Disclosure Statements for 2002 will be due on May 15, 2003, and those subject to the reporting requirement will be notified automatically in March or April of next year.

Restrictions on Outside Earned Income and Employment. A House employee who is paid at or above an annual rate of $99,096 for more than 90 days in 2002 is also subject to a number of restrictions on outside earned income and employment. The major restrictions are as follows:

• Those employees may not have outside earned income exceeding a limitation that is established by both statute and House Rule. In 2002 that limitation is $22,500. Where an employee is paid at or above the threshold rate for only part of a year, the limitation is pro rated.
• Those employees are subject to a number of restrictions on outside employment, including that (1) they may not receive compensation for practicing a profession that involves a fiduciary relationship, such as the practice of law, (2) they may not serve for compensation as an officer or board member of any corporation or other entity, and (3) they may not receive compensation for teaching without the prior approval of this Committee.
• Those employees may not receive any advance payment on copyright royalties, and they may not receive any copyright royalties unless this Committee first approves the publishing contract.

Post-Employment Restrictions. A House employee who, in the one-year period prior to the termination of his or her employment with the House, is paid at or above an annual rate of $112,500 for 60 days or more in the aggregate is subject to post-employment lobbying restrictions. Those restrictions are summarized in detail in a Standards Committee advisory memorandum of October 22, 1998.

Any questions on these requirements and restrictions should be directed to the Committee’s Office of Advice and Education at 5-7103.

¹  Regarding the implications of paying additional compensation to an employee in the form of a "lump sum payment," rather than an increase in the employee’s House salary, see the Standards Committee’s Advisory Memorandum on lump sum payments of October 15, 1999. Copies of that memorandum are available from the Committee office and on its Web site, www.house.gov/ethics. In order to make a lump sum payment to an employee, an office must file the proper form for that purpose, and must comply with the rules issued by the House Administration Committee for such payments.

²  House Members are subject to the requirement and restrictions noted here under specific provisions of statutory law and the House Rules, and all House officers are subject to them in that their rate of basic pay is above both of the salary trigger levels.