Authorizes the head of a Federal agency (currently, the President) to establish higher minimum rates of basic pay in geographic areas where the agency is experiencing significant recruitment or retention problems. Sets forth procedural requirements prior to the establishment of such higher pay. Provides for periodic increases, bonus payments, and advances of pay for employees hired under such pay rates. Authorizes agencies to fill vacancies in areas with recruitment problems on an expedited basis. Requires employees selected for training by, in, or through a Government facility to agree to extended service after such training and to reimburse the Government for training expenses upon violating such agreement. Eliminates the GS-11 threshold for appointing employees above the minimum rate of pay. Declares that agencies are encouraged to develop and propose methods to attract talented and qualified personnel.