Reservist Differential Pay: Federal Employees on Active Duty Orders May Be Owed the Gap, and What It Is Worth by Rank

What is settled: under 5 U.S.C. 5538, a federal civilian employee who is absent from the job to serve on active duty under a covered call or order is owed, every civilian pay period, the amount by which their civilian basic pay exceeds their military pay and allowances. On April 30, 2025, the Supreme Court held in Feliciano v. Department of Transportation that a reservist ordered to active duty "during a national emergency" qualifies if the service simply coincides in time with a declared national emergency, with no need to prove the duty was connected to it. On January 22, 2026, the Merit Systems Protection Board applied that ruling to a reservist on voluntary 10 U.S.C. 12301(d) orders and ordered the pay. What is not settled: OPM's published guidance and FAQ still say voluntary 12301(d) duty does not qualify, and a class appeal filed by five reservists in September 2026 asking the MSPB to order back pay for the whole group is pending. No class-wide ruling exists yet.

Who the law covers

• A federal civilian employee of a covered agency who is also a member of the Reserve or National Guard. OPM's guidance excludes FAA and TSA employees by statute, though their agencies run their own procedures.
• Absent on active duty under a provision of law referred to in 10 U.S.C. 101(a)(13)(B). That list names sections 688, 12301(a), 12302, 12304, 12304a, 12305 and 12406 of title 10, chapter 13 of title 10 (the Insurrection Act), section 3713 of title 14 (Coast Guard), and ends with "any other provision of law during a war or during a national emergency declared by the President or Congress."
• With USERRA reemployment rights for that service (38 U.S.C. chapter 43).
• Reduced for any paid civilian hours. The differential is paid for the unpaid part of each pay period; any hour of paid work or paid leave in that period reduces it in proportion.

What Feliciano changed, and what OPM still says

Mr. Feliciano, an FAA air traffic controller and Coast Guard reservist, served on 12301(d) orders from 2012 to 2017 and was denied differential. The Court held 5 to 4 that "during" in the catchall clause is temporal: if your orders fall within a declared national emergency, you qualify. The national emergency declared on September 14, 2001 after the terrorist attacks has been continued every year since; the latest notice, signed September 8, 2026, continues it beyond September 14, 2026.

The MSPB then decided Sopko v. Department of Veterans Affairs, 2026 MSPB 1. An Air Force Reserve member attended Officer Training School at Maxwell AFB on 12301(d) orders from August 25 to October 21, 2020. The Board held that because the duty "temporally coincided with a declared national emergency, he is entitled to differential pay" and ordered corrective action. OPM's FAQ, as of today, still says qualifying active duty "does not include voluntary active duty under 10 U.S.C. 12301(d)." That gap between the published guidance and the case law is why many agencies have not paid, and it is the core of the new class appeal.

How the differential is computed

1. 1Military side. Take the gross monthly military pay and allowances from your LES: basic pay, BAS, BAH, and monthly special and incentive pays such as hostile fire or imminent danger pay, family separation allowance and COLA. Travel, per diem and lump-sum bonuses are excluded. OPM does not add any value for the tax-free status of BAH and BAS.
2. 2Daily rate. Divide the month by 30 (or by the actual days of duty in a partial month), rounded to the cent.
3. 3Per pay period. Multiply the daily rate by the calendar days of the civilian pay period on duty, normally 14.
4. 4Civilian side. Your hourly rate, including locality pay, times the hours in your tour, normally 80. Count the within-grade increases and pay raises you would have received.
5. 5Subtract. If civilian pay is higher, the difference is owed for that period, reduced for any paid civilian hours.

Military pay and allowances by rank, 2026

The table applies OPM's steps to 2026 basic pay, BAS and with-dependents BAH for the Washington, DC metro area (MHA DC053), where many federal employees work. Your BAH depends on your orders, and any special pays you draw add to the military side, so use your own LES for the real number. The last three columns compare a full 14-day pay period against GS-12, GS-13 and GS-14 step 5 on the 2026 Washington, DC locality table ($55.62, $66.14 and $78.15 an hour times 80 hours: $4,449.60, $5,291.20 and $6,252.00).

The pattern is the point. Junior and mid-grade enlisted members with professional federal jobs are the ones with a gap: an E-5 who is a GS-13 in Washington is short $1,689.00 every pay period on orders, and that is the amount the agency owes. Field-grade officers in the same grades usually earn more in uniform than at their desks, so nothing is owed. Check your own numbers with the basic pay calculator, the BAH rates for your orders, and the RMC calculator.

Taxes on the differential

Per IRS guidance quoted in OPM's policy, the differential is taxable wages reported on your civilian W-2. It is not subject to Social Security and Medicare tax when the active duty lasts more than 30 days, and it is subject to them for orders of 30 days or less. It is not civilian basic pay for retirement or life insurance purposes. Your military pay is taxed separately; the federal tax calculator estimates withholding on the military side.

What to do if you think you are owed

• Give your agency your orders and every LES. OPM's guidance makes the employee responsible for providing the LES, and the agency may delay payment if the paperwork is late.
• If your orders are 12301(d) or another provision not on OPM's list, point your HR office to Feliciano and Sopko and to the national emergency in effect during your orders.
• If the agency still refuses, USERRA lets you file directly with the Merit Systems Protection Board (38 U.S.C. 4324(b)), and 38 U.S.C. 4327(b) says there is no time limit for filing a USERRA claim.
• Get help. Your reserve unit's legal office and the Employer Support of the Guard and Reserve ombudsman can review your case. This page is general information, not legal advice.

The bottom line

5 U.S.C. 5538 requires your agency to make up the gap between your civilian basic pay and your military pay and allowances while you serve on covered orders. Feliciano and Sopko say orders that fall within a declared national emergency are covered, including voluntary 12301(d) orders, even though OPM's published guidance has not caught up. At 2026 rates in Washington, the gap runs from nothing for an O-4 or O-5 to $2,877.30 per pay period for an E-4 who is a GS-14. Rates shown are FY2026; always verify with your finance office and your agency's HR office before making financial decisions.