[Federal Register: December 3, 2007 (Volume 72, Number 231)]
[Rules and Regulations]
[Page 67831-67841]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr03de07-1]
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Rules and Regulations
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[[Page 67831]]
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 530 and 575
RIN: 3206-AK81
Recruitment, Relocation, and Retention Incentives
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management is issuing final
regulations on recruitment, relocation, and retention incentives. The
final regulations revise the interim regulations by making a number of
technical modifications, corrections, and clarifications. The final
regulations continue to provide agencies with additional flexibility to
help recruit and retain Federal employees and better meet agency
strategic human capital needs.
DATES: Effective Date: January 2, 2008.
FOR FURTHER INFORMATION CONTACT: Jeanne Jacobson by telephone at (202)
606-2858; by fax at (202) 606-0824; or by e-mail at
pay-performance-policy@opm.gov.
SUPPLEMENTARY INFORMATION: On May 13, 2005, the Office of Personnel
Management (OPM) published interim regulations (70 FR 25732) to
implement section 101 of the Federal Workforce Flexibility Act of 2004
(Pub. L. 108-411, October 30, 2004). Section 101 amended 5 U.S.C. 5753
and 5754 by providing a new authority to make recruitment, relocation,
and retention payments. The amended law replaced the former recruitment
and relocation bonus and retention allowance authority provided by 5
U.S.C. 5753 and 5754. The 60-day comment period for the interim
regulations ended July 12, 2005.
During the comment period, we received comments from eight
agencies, one employee organization, and eight individuals. A number of
the commenters stated they are pleased with the flexibilities provided
by the interim regulations. They believe the enhanced recruitment,
relocation, and retention incentive (3Rs) authorities will allow
agencies to be more competitive with the private sector and assist in
recruiting and retaining highly qualified employees and candidates. The
commenters support the approach taken by OPM to provide agencies with
maximum flexibility and discretion to craft plans for administering the
incentives to best meet their needs.
The Supplementary Information for the interim regulations posed a
number of questions about whether the 3Rs regulations should provide
agencies with the authority to pay recruitment incentives to help
recruit current employees (as authorized by 5 U.S.C. 5753(b) under
conditions that would be described in OPM regulations) and to pay
retention incentives to help retain employees likely to leave for a
different Federal position (as authorized by 5 U.S.C. 5754(b) under
conditions that would be described in OPM regulations) and, if so,
under what circumstances.
The comments we received in response to these questions are not
addressed in these final regulations, but will be addressed in a future
Federal Register notice. This Federal Register notice addresses the
remaining comments and makes a number of technical revisions and
clarifications in the 3Rs regulations, which are summarized below.
Comments Applicable to Recruitment, Relocation, and Retention
Incentives
Definition of Basic Pay (Sec. Sec. 530.202, 575.102, 575.202, and
575.302)
An individual expressed confusion about the definition of basic pay
in the aggregate limitation on pay regulations at Sec. 530.202 and the
definition of rate of basic pay in the recruitment, relocation, and
retention incentive regulations at Sec. Sec. 575.102, 575.202, and
575.302, respectively. The commenter questioned why the terms
themselves are different and why they are defined differently.
Similar terms may be used and defined in different ways in title 5,
Code of Federal Regulations, depending on the purpose of the term and
statutory requirements. Differences in the term basic pay for the
purpose of the aggregate limitation on pay and the term rate of basic
pay for the purpose of the 3Rs are necessary based on how each term is
used in its respective subpart of the regulations. Each term must be
read only within the context of the subpart of the regulation in which
it is defined. In the aggregate limitation on pay regulations, an
employee's basic pay is added to certain other payments authorized
under title 5, United States Code, to determine whether the employee's
total pay has reached the aggregate limitation on pay in the calendar
year. In the 3Rs regulations, an employee's rate of basic pay is used
to compute recruitment and relocation incentive payment limits and
retention incentive payments.
Eligible Categories of Employees (Sec. Sec. 575.103, 575.203, and
575.303)
An agency questioned whether employees under administratively
determined (AD) pay systems are covered by the 3Rs authorities. The
agency wanted to ensure that AD employees are covered.
OPM has not regulated that all AD positions are eligible for
recruitment, relocation, and retention incentives. Under 5 U.S.C.
5753(a)(1)(B) and 5754(a)(1)(B), OPM may approve coverage of a category
of non-General Schedule (non-GS) employees under the 3Rs authorities at
the request of the head of an Executive agency. When we issued the
interim regulations implementing the new authorities, OPM approved
those categories of non-GS employees that were previously covered under
the former recruitment and relocation bonus and retention allowance
authorities for coverage under the new authorities, except when such
categories are excluded by law (5 U.S.C. 5753(a)(2) and 5754(a)(2)) or
regulation (Sec. Sec. 575.104, 575.204, and 575.304). (See CPM 2005-08
on OPM's Web site at http://www.opm.gov/oca for additional information
and a list of approved single-agency categories of employees.) If a
category of AD employees (or other employee category) is not already
approved for coverage, the head of an Executive agency may request OPM
approval for coverage of such employees. The coverage of each category
of AD positions requires separate OPM approval.
The same agency noted the regulations at Sec. Sec. 575.103,
575.203, and
[[Page 67832]]
575.303 cover employees in a position under the Executive Schedule paid
under 5 U.S.C. 5311-5317. The agency stated Executive Schedule
positions are filled using presidential appointments and such
appointments are excluded from coverage under Sec. Sec. 575.104,
575.204, and 575.304. The agency commented that the regulations appear
to be contradictory and suggested the coverage of Executive Schedule
positions be restated or clarified.
We agree most Executive Schedule positions are filled using
presidential appointments and, thus, employees appointed to such
positions would not be eligible for 3Rs payments under Sec. Sec.
575.104, 575.204, and 575.304. However, we are retaining the provision
in Sec. Sec. 575.103, 575.203, and 575.303 stating employees appointed
to or in Executive Schedule positions are eligible for 3Rs payments to
ensure that an employee in an Executive Schedule position that is not
otherwise excluded by Sec. 575.104, 575.204, and 575.304 (e.g., not a
presidential appointee) remains eligible for such payments.
Another agency asked for clarification on whether employees of
nonappropriated fund instrumentalities (NAFI) are eligible for
recruitment, relocation, and retention incentives. We have not made a
change to the regulations in response to this comment. An employee in a
NAFI position meeting the definition of a prevailing rate position in 5
U.S.C. 5342(a)(3) is eligible for recruitment, relocation, and
retention incentives, as long as the position is not otherwise excluded
by Sec. Sec. 575.104, 575.204, and 575.304. (See Sec. Sec.
575.103(f), 575.203(f), and 575.303(f).) As of the date of publication
of these final regulations in the Federal Register, all other
categories of NAFI positions (e.g., ``white collar'' NAFI positions)
are ineligible for 3Rs payments. However, because a NAFI employee is
covered by the definition of employee in 5 U.S.C. 5753(a)(3) and
5754(a)(3) and Sec. Sec. 575.102, 575.202, and 575.302 of the
regulations, OPM may extend coverage of the 3Rs authorities to
currently excluded categories of NAFI employees upon request of the
head of an Executive agency.
Finally, we are revising the introductory text in Sec. Sec.
575.103, 575.203, and 575.303 to clarify that only an Executive agency
(as defined in Sec. Sec. 575.102, 575.202, and 575.302) may pay
recruitment, relocation, and retention incentives to the categories of
non-GS employees listed in those sections. (See 5 U.S.C. 5753(a)(1)(B)
and 5754(a)(1)(B).) These sections continue to provide that an agency
in the executive branch or legislative branch may pay recruitment,
relocation, and retention incentives to GS employees. (See the
definition of agency in Sec. Sec. 575.102, 575.202, and 575.302.)
Payment Approval Levels (Sec. Sec. 575.107, 575.207, and 575.307)
An individual questioned whether the authority to approve 3Rs
requests could be delegated to the immediate supervisor of the employee
receiving the 3Rs incentive provided the supervisor is the head of a
departmental element who reports to the head of an agency and the
employee receiving the incentive is not a member of the Senior
Executive Service. The commenter noted the second-level supervisory or
managerial approval requirement seems contrary to OPM's intent to
expeditiously hire and retain the best and brightest and stated ``this
new requirement will actually slow the process and hamper efforts to
review and approve 3R incentives in a timely manner.''
We understand the need for streamlined and efficient agency
approvals of 3Rs incentives. However, this need must be balanced with
an appropriate and judicious use of the authorities. We note that the
second-level supervisory or management approval of 3Rs incentives is
not a new requirement-i.e., it was required by the regulations for the
former recruitment and relocation bonus and retention allowance
authorities and was carried over into the new regulations. Since no
additional approval levels have been added, we foresee no slowing of
the approval process because of the new regulations.
We note that several provisions in the regulations make it possible
to approve incentives without a second-level supervisory or managerial
review. For example, the regulations at Sec. 575.107(b)(2) allow an
agency to establish criteria in advance so an employment candidate's
supervisor or equivalent-level official may offer a recruitment
incentive within a pre-established range without further review or
approval. Also, the relocation incentive regulations at Sec.
575.207(b)(2) do not require higher-level approval when approving
coverage of individual employees under a previously approved group
relocation incentive authorization under Sec. 575.208(b). Finally,
under Sec. 575.307(b)(2), second-level supervisory or managerial
approval is not required when approving coverage of individual
employees under a previously approved group retention incentive
authorization.
In addition, agencies have considerable discretion when they craft
their 3Rs plans to decide which officials will have approval authority
for these incentives. (See Sec. Sec. 575.107(a)(1), 575.207(a)(1), and
575.307(a)(1).) If agencies require very high-level reviews for these
incentives, the approval process may become slow and unwieldy. However,
this is a matter that must be decided at the agency level.
Paying Recruitment, Relocation, and Retention Incentives Concurrently
(Sec. Sec. 575.109, 575.209, and 575.309)
Two agencies requested the regulations specify whether the service
agreement periods for more than one type of incentive should be served
concurrently or sequentially. Another agency pointed out the
regulations do not address the ability to offer a recruitment incentive
followed by a relocation incentive and suggested the explanation of the
order of and the basis for offering multiple incentives be described
more thoroughly in each respective section under Sec. Sec. 575.109,
575.209, and 575.309.
We agree that the regulations should clarify these issues. The
interim retention incentive regulations at Sec. 575.309(g) provided an
agency may not commence a retention incentive service agreement (or
begin paying a retention incentive without a service agreement) during
a period of employment established under a service agreement required
for the payment of a recruitment incentive or a relocation incentive.
After a retention incentive service agreement has commenced (or
retention incentive payments without a service agreement have
commenced), the retention incentive regulations allowed an agency to
pay a relocation incentive without affecting the payment of an existing
retention incentive. However, the interim recruitment and relocation
incentive regulations were silent on paying recruitment, relocation,
and retention incentives concurrently and whether employees should
serve multiple 3Rs service agreements concurrently or sequentially.
These final regulations provide the following rules regarding
concurrent recruitment, relocation, and retention incentive payments:
New Sec. 575.105(c) provides that an agency may not
commence a recruitment incentive service agreement during (1) a period
of employment established under a service agreement required for a
relocation incentive, or (2) during a period of employment established
under a service agreement for a previously authorized retention
incentive or for which an employee is receiving a previously authorized
retention incentive without a service agreement.
[[Page 67833]]
New Sec. 575.205(d) provides that an agency may not
commence a relocation incentive service agreement during (1) a period
of employment established under any service agreement required for a
recruitment incentive, or (2) a period of employment established under
any service agreement required for a previously authorized relocation
incentive.
New Sec. 575.205(e) provides that an agency may commence
a relocation incentive service agreement during a period of employment
established under a service agreement for a previously authorized
retention incentive or for which an employee is receiving previously
authorized retention incentive payments without a service agreement.
(This provision was formerly in Sec. 575.309(g).) This new paragraph
also clarifies that the service period under two such service
agreements must run concurrently.
Revised Sec. 575.309(g) provides that an agency may not
commence a retention incentive service agreement (or begin paying a
retention incentive without a service agreement) during (1) a period of
employment established under any service agreement required for payment
of a recruitment incentive or a relocation incentive or (2) a period of
employment established under a service agreement for a previously
authorized retention incentive or for which an employee is receiving a
previously authorized retention incentive without a service agreement.
Except as provided in Sec. 575.205(e), these regulatory changes
prohibit the simultaneous payment of multiple incentives and prohibit
concurrent 3Rs service agreements. However, the recruitment,
relocation, and retention incentive authorities provide substantial
flexibility to make sizable incentive payments in situations in which
offering multiple incentives may otherwise be attractive. For example,
if an employee fulfilling a recruitment incentive service agreement is
relocated to a different geographic area in a difficult to fill
position, the regulations provide the agency the flexibility to
terminate the recruitment incentive service agreement under Sec.
575.111(a) and authorize a relocation incentive under 5 CFR part 575,
subpart B, in its place. In this case, the employee would not be
disadvantaged because under Sec. 575.111(e), the employee would be
entitled to all recruitment incentive payments attributable to
completed service and to retain any portion of a recruitment incentive
payment already received that is attributable to uncompleted service.
The agency could consider any remaining recruitment incentive payments
and time remaining under the recruitment incentive service agreement in
determining the amount of the relocation incentive and length of the
relocation incentive service agreement.
Similarly, if an employee receiving a group retention incentive
under Sec. 575.305(b) is still likely to leave Federal service and has
unusually high or unique qualifications that are not adequately covered
by the group retention incentive authorization, the agency could
terminate the group retention incentive under Sec. 575.311(a) for the
individual employee and authorize an individual retention incentive
under Sec. 575.305(a) for the employee. The agency could consider the
amount of the group retention incentive and time remaining under the
group retention incentive service agreement, if any, in determining the
amount of the new retention incentive and length of any new retention
incentive service agreement.
Definition of ``Fully Successful'' (Sec. Sec. 575.110(d), 575.111(b),
575.205(c), 575.210(d), 575.211(b), 575.305(d), 575.306(c)(2),
575.310(d), 575.311(b), and 575.311(f)(5)(ii))
An agency requested clarification of the definition of ``fully
succeed'' [sic] due to variances in Federal performance ratings. The
agency questioned whether the intent is to limit the payment of
recruitment incentives to only those employees whose rating of record
is at the highest level under the applicable performance appraisal
system and recommended that employees at least one level below the
highest level be eligible, so as to accommodate the ratings of new
hires.
Because recruitment incentives may be paid only to newly-appointed
Federal employees (or former employees with a 90-day break in service),
the regulations do not require an employee to have a ``Fully
Successful'' or higher rating of record to receive a recruitment
incentive. However, the regulations at Sec. Sec. 575.205(c) and
575.305(d) provide that a relocation and retention incentive may be
paid to an employee only when the employee's rating of record (or
official performance appraisal or evaluation under a system not covered
by 5 U.S.C. chapter 43 or 5 CFR part 430) is at least ``Fully
Successful'' or equivalent. In addition, the regulations at Sec. Sec.
575.110(d), 575.111(b), 575.210(d), 575.211(d), 575.310(d), 575.311(b),
and 575.311(f)(5)(ii) require agencies to terminate 3Rs service
agreements and retention incentive payments when no service agreement
is required if the employee receives a rating of record of less than
``Fully Successful'' or equivalent. We note ``Fully Successful'' is not
intended to refer to a rating of record that is the highest level under
an applicable performance appraisal system, unless the performance
appraisal system is a pass-fail system.
Repayment Waivers (Sec. Sec. 575.111(g) and 575.211(g))
Sections 575.111(g) and 575.211(g) of the interim regulations
provided that the head of an agency may use the authority in 5 U.S.C.
5584 to waive a debt resulting from an employee's failure to reimburse
the agency for the full amount of a recruitment or relocation incentive
repayment requirement when the employee fails to fulfill a required
service period. An individual commented that OPM appears to have the
authority to permit agencies to waive repayment of recruitment and
relocation incentives without reliance on 5 U.S.C. 5584 because 5
U.S.C. 5753(g) permits OPM to promulgate ``regulations relating to
repayment of a bonus under this section under appropriate circumstances
when the agreed upon service period has not been completed.'' The
commenter also noted such waivers should not be routine, but
circumstances are likely to arise under which repayment of unliquidated
amounts would constitute an undue hardship, such as for unforeseen and
compelling personal reasons.
We agree that it is appropriate for OPM to use its regulatory
authority at 5 U.S.C. 5753(g) to provide agencies with the authority to
waive the requirement to repay recruitment or relocation incentive
payments attributable to uncompleted service when a service agreement
is terminated under Sec. Sec. 575.111(b) and 575.211(b), rather than
relying on the agency's authority to waive recovery of an erroneous
payment under 5 U.S.C. 5584. We are revising the regulations at
Sec. Sec. 575.111(g) and 575.211(g) to remove the reference to an
agency's authority to waive a debt under 5 U.S.C. 5584. We also are
adding new paragraphs Sec. Sec. 575.111(h) and 575.211(h) to provide
an authorized agency official with the authority to waive the
requirement for an employee to repay recruitment or relocation
incentive payments attributable to uncompleted service under Sec. Sec.
575.111(f) and 575.211(f) when collection of the excess payments from
the employee would be against equity and good conscience and not in the
best interests of the United States. Agencies should ensure such waiver
authority is used judiciously. (See also the conforming changes in
Sec. Sec. 575.107(a)(1) and 575.207(a)(1).)
[[Page 67834]]
Agencies continue to have the authority under 5 U.S.C. 5584 to waive
recovery of recruitment or relocation incentives or other pay or
allowances that are paid erroneously.
Reporting Requirements (Sec. Sec. 575.113, 575.213, and 575.313)
An agency requested the supplementary information or final
regulations clarify that the Department of Defense (DOD) and United
States Coast Guard (USCG) are not expected to report incentives paid to
prevailing rate employees from non-appropriated funds in its submission
for OPM's report to Congress. The agency stated, although NAFI
prevailing NAFI rate employees are included in the definition of
employee and in the eligible categories of employees for each type of
incentive, a 3Rs payment paid to those employees is paid out of funds
not appropriated by Congress.
We do not agree. Incentives paid from non-appropriated funds should
be included in the annual report to OPM required by Sec. Sec.
575.113(b), 575.213(b) and 575.313(b). The congressional reporting
requirement in section 101(c) of the Federal Workforce Flexibility Act
of 2004 does not make a distinction between appropriated and non-
appropriated fund positions. Agencies should report required 3Rs data
and information for both types of employees.
Comments Applicable to Recruitment Incentives
Definition of ``Newly Appointed'' (Sec. 575.102)
An agency asked for clarification on whether the regulations permit
the payment of recruitment incentives to employees moving from either
prevailing rate or white-collar NAFI positions to positions covered by
the recruitment incentive regulations (e.g., GS). Under 5 U.S.C.
5753(b)(2)(A), a recruitment incentive may be paid to an employee
``newly appointed as an employee of the Federal Government.'' Newly
appointed is defined in Sec. 575.102 as referring to (1) the first
appointment as an employee of the Federal Government, (2) an
appointment of a former employee of the Federal Government following a
90-day break-in-service, or (3) an appointment as an employee of the
Federal Government when the employee's Federal service during the 90-
day period immediately preceding the appointment was limited to certain
types of employment (e.g., a time-limited appointment).
Under the interim regulations, certain categories of NAFI employees
in DOD and USCG were considered newly appointed and eligible to receive
a recruitment incentive under the conditions prescribed in 5 CFR part
575, subpart A, when moving to a position listed in Sec. 575.103
(i.e., NAFI employees who moved to a position in the same agency after
more than a 3-day break in service and NAFI employees who moved to a
position in a different agency with or without a break in service).
Such NAFI employees did not need the 90-day break in service required
by paragraph (2) of the definition of newly appointed to receive a
recruitment incentive. (See the exemptions in paragraphs (3)(iv) and
(v) of that definition in the interim regulations.)
Based on the definition of employee in Sec. 575.102 and the
definition of employee in 5 U.S.C. 5753(a)(3), both of which
specifically include a DOD and USCG NAFI employee, as described in 5
U.S.C. 2105(c), we believe it would be more consistent to revise the
definition of newly appointed in these final regulations to remove the
special exemptions from the 90-day break-in-service requirement in
paragraphs (3)(iv) and (v) of the definition of newly appointed for DOD
and USCG NAFI employees. In other words, all DOD and USCG NAFI service
will be considered Federal service in applying the 90-day break-in-
service rule. DOD and USCG NAFI employees must have a 90-day break-in-
service to be eligible for a recruitment incentive upon movement to a
position listed in Sec. 575.103 (unless one of the remaining
exclusions in the definition of newly appointed applies).
Payment and Repayment Requirements (Sec. 575.111)
An agency recommended amending Sec. 575.111(b) and (f) to state
employees must repay recruitment incentive payments for any part of the
service period in which they did not meet all of the terms of the
service agreement; e.g., for periods of unsatisfactory performance. The
same agency recommended the regulations require full repayment of a
recruitment incentive if employment is terminated due to falsified
employment documents or pre-employment conditions.
The regulations at Sec. 575.111(b) require an agency to terminate
a recruitment incentive service agreement when an employee receives a
rating of record of less than ``Fully Successful'' or equivalent or
when an employee otherwise fails to fulfill the terms of the service
agreement. If an agency terminates a service agreement for such
reasons, Sec. 575.111(f) provides that the employee is entitled to
keep any portion of recruitment incentive payments already received
that are attributable to completed service; however, the employee is
obligated to repay any recruitment incentive payments received
attributable to uncompleted service. Under this section, if an employee
has received recruitment incentive payments less than the amount
attributable to completed service when the service agreement is
terminated, the agency is not obligated to pay the employee the amount
attributable to completed service, unless the agency agreed to such
payment in the employee's service agreement. Agencies may want to
consider not paying all of a recruitment incentive as an up-front,
lump-sum payment in advance of the employee fulfilling a service period
and, instead, paying all or part of a recruitment incentive after an
employee successfully completes all or part of the service period.
We agree the regulations should require full repayment of a
recruitment incentive if employment is terminated due to falsified
employment documents or pre-employment conditions. We are adding a new
paragraph (j) to Sec. 575.111 to require an employee to repay all
recruitment incentive payments if an agency terminates a service
agreement when an employee is separated as a result of material false
or inaccurate statements or deception or fraud in examination or
appointment, or as a result of failing to meet employment
qualifications.
An individual commented, if an applicant accepts an offer of
employment along with a recruitment incentive, an agency should not be
able to cancel the agreement (unless for poor performance) without
paying out the full amount of the incentive (regardless of the
installment plan). The individual stated if an applicant accepts a
recruitment incentive offer in good faith, allowing the agency to
terminate the service agreement without paying the full incentive
seemed unfair.
We disagree. The regulations provide appropriate protections for an
employee if the agency terminates a service agreement when the employee
is not at fault. Section 575.111(e) provides that such an employee is
entitled to receive recruitment incentive payments attributable to
completed service and to keep any recruitment incentive payments
already received for completed and uncompleted service. An agency
should not be obligated to pay additional recruitment incentive
payments for service that is not completed under a terminated service
agreement.
An agency commented the recruitment incentive repayment
[[Page 67835]]
requirements are not consistent with the student loan repayment
regulations which require full repayment if a service agreement is not
completed. The student loan repayment program is based on a different
statutory authority with different repayment requirements if the
service agreement is not fulfilled. Under 5 U.S.C. 5379, an employee is
obligated to reimburse the paying agency for the full amount of the
student loan repayment benefits provided when the employee voluntarily
separates from Federal service, or is separated involuntarily due to
misconduct or poor performance, and does not complete the terms of the
student loan repayment service agreement. There is no similar statutory
requirement for recruitment incentives in 5 U.S.C. 5753. Under 5 U.S.C.
5753(c)(2), OPM has the authority to regulate the terms and conditions
under which recruitment incentives are payable, including the
conditions under which a service agreement may be terminated and the
effect of the termination. Consistent with the former recruitment bonus
authority, the recruitment incentive regulations at Sec. 575.111
generally require a pro-rated repayment of incentive payments received
that are attributable to uncompleted service if a service agreement is
not fulfilled.
The same agency commented that Sec. 575.111(f) is vague and stated
clarification is needed on whether agencies have the discretion to
define completed service as the duration of the service agreement. The
agency questioned whether it may require full repayment if the employee
fails to complete a service period or must the repayment amount be
prorated based on the portion of the agreement served.
Under Sec. 575.110(a), a service period is the period of
employment that an employee agrees to fulfill in exchange for a
recruitment incentive, as documented in the employee's service
agreement. ``Completed service,'' as used in Sec. 575.111, is the
amount of time the employee has fulfilled under the service agreement,
and ``uncompleted service'' is the amount of time the employee has not
fulfilled under the service agreement. We are clarifying the
recruitment and relocation incentive regulations by adding a new
paragraph (i) to Sec. Sec. 575.111 and 575.211 to provide that in
determining the amount of recruitment and relocation incentive payments
attributable to completed and uncompleted service, agencies must
prorate the full amount of the authorized incentive payments across the
length of the service period. (See the fact sheet at http://www.opm.gov/oca/PAY/HTML/rectermcalc.asp
for additional information.)
Additional Changes
We are making the following additional changes to the recruitment
incentive regulations to correct technical errors and make minor
clarifications:
Revising the definition of employee and replacing the
definition of employee of the Federal Government with Federal
Government in Sec. 575.102 to eliminate redundancy and circular
language regarding NAFI employees. These final regulations also revise
paragraphs (2) and (3) in the definition of newly appointed in Sec.
575.102 consistent with these new definitions.
Revising paragraph (3)(i) of the definition of newly
appointed in Sec. 575.102 to clarify a ``nonpermanent appointment''
excludes a Schedule C appointment under 5 CFR part 213. An agency may
not pay a recruitment incentive to an employee moving from a Schedule C
appointment to a non-Schedule C appointment, unless the employee has a
90-day break in service.
Adding employment under the Student Career Experience
Program under 5 CFR 213.3202(b) as a new paragraph (3)(vi) in the
definition of newly appointed in Sec. 575.102. A similar provision was
included in the former recruitment bonus regulations, but it was
inadvertently left out of the interim recruitment incentive
regulations.
Adding an appointment as an expert or consultant under 5
U.S.C. 3109 and 5 CFR part 304 as a new paragraph (3)(iv) in the
definition of newly appointed in Sec. 575.102. Service under a
temporary expert and consultant appointment is already not counted as
Federal service in applying the 90-day break-in-service requirement in
the existing definition of newly appointed. This addition will ensure
that service under an intermittent ``expert and consultant''
appointment that is not a temporary appointment also is disregarded in
applying the 90-day break-in-service requirement.
Revising Sec. 575.106(b)(1) to clarify a factor for
determining when a position is likely to be difficult to fill is the
availability and quality of candidates possessing the competencies
required for the position, including the success of recent efforts to
recruit candidates for ``the position or similar positions.'' The
language in the interim regulations stated only the success of recent
efforts to recruit candidates for ``similar positions.''
Clarifying Sec. 575.107(b)(1) to provide an authorized
agency official must review and approve the recruitment incentive
determination before paying the incentive to the employee.
Comments Applicable to Relocation Incentives
Definition of Temporary Relocation (Sec. 575.205(a)(2))
An agency commented that the Supplementary Information of the
interim regulations stated that a relocation incentive may be paid for
a temporary relocation. The agency suggested ``temporary relocation''
should be defined.
We do not agree. Section 575.205(a) provides an agency may pay a
relocation incentive to an employee who must relocate to a different
geographic area ``permanently or temporarily.'' Because there is no
minimum length for a relocation incentive service agreement as there is
for recruitment incentives, it is not necessary to define what is meant
by ``temporary relocation.'' Note that under Sec. 575.205(b) employees
must establish a residence in the new geographic area before an agency
may pay a relocation incentive to an employee, even when the employee
is relocated to a different geographic area on a temporary basis.
Payment to Former NAFI Employees (Sec. 575.205(a))
An agency requested clarification of whether relocation incentives
may be paid to DOD or USCG NAFI employees who move to appropriated fund
positions. An agency may pay a relocation incentive to a white-collar
or prevailing rate NAFI employee in a DOD or USCG NAFI position who
moves without a break in service to an appropriated fund position that
is eligible for relocation incentives under Sec. 575.203 and that is
in a different geographic area. Consistent with the definition of
employee in 5 U.S.C. 5753(a)(3), employee is defined in Sec. 575.202
to mean an employee as defined in 5 U.S.C. 2105 ``except that the term
also includes an employee described in 5 U.S.C. 2105(c) * * *.''
Section 2105(c) of title 5, United States Code, covers DOD and USCG
NAFI employees.
To help clarify this further, Sec. 575.202 includes a revised
definition of employee and replaces the definition of employee of the
Federal Government with Federal Government to eliminate redundancy and
circular language regarding NAFI employees. Also, we are revising Sec.
575.205(a) to provide that an agency may pay a relocation incentive
under the conditions in 5 CFR part 575, subpart B, to an employee (as
that term is newly defined) who (1) relocates to a
[[Page 67836]]
different geographic area (temporarily or permanently) to accept a
position listed in Sec. 575.203 in an agency that is likely to be
difficult to fill and (2) is an employee of the Federal Government (as
those terms are newly defined) immediately before the relocation.
Additional Changes
We are making the following additional changes to the relocation
incentive regulations to correct technical errors and make minor
clarifications:
Revising Sec. 575.206(a)(4) to replace the term
``recruitment incentive'' with ``relocation incentive.''
Revising Sec. 575.206(b)(1) to clarify a factor for
determining when a position is likely to be difficult to fill is the
availability and quality of candidates possessing the competencies
required for the position, including the success of recent efforts to
recruit candidates for ``the position or similar positions.'' The
language in the interim regulations stated only the success of recent
efforts to recruit candidates for ``similar positions.''
Revising Sec. 575.207(b)(1) to clarify an authorized
agency official must review and approve a relocation incentive
determination before paying the incentive to the employee.
Revising Sec. 575.210(e) by removing the words ``agree
to'' in the second sentence so that the language is parallel to Sec.
575.110(e) of the recruitment incentive regulations.
Comments Applicable to Retention Incentives
Group Retention Incentives (Sec. 575.309(a)(2))
An agency recommended that the limit on an agency's authority to
approve group retention incentives under Sec. 575.309(a)(2) be raised
from 10 percent to 25 percent. The agency stated with the increase in
the maximum retention incentive amount from 25 to 50 percent, it would
be appropriate to raise the agency authority to approve group retention
incentives from the current 10 percent to 25 percent.
We do not agree. The 10 percent limitation on an agency's authority
to approve group retention incentives is provided by statute at 5
U.S.C. 5754(e)(1)(B). The law requires OPM approval of group retention
incentives in excess of 10 percent. (See 5 U.S.C. 5754(f).)
Computing Lump-Sum Retention Incentives (Sec. 575.309(d))
An agency recommended the regulations describe how to calculate the
total basic pay earned during a full service period for the purpose of
calculating a retention incentive paid at the end of the service
period. We are adding an example to Sec. 575.309(d) that shows how to
compute a retention incentive for the full period of service under a
service agreement (including the total amount of basic pay earned
during the full period of service) consistent with the example in Sec.
575.309(c)(1).
Grandfathered Retention Allowances (Sec. 575.314)
An individual requested clarification on why an agency would not
renew or continue a retention allowance that was originally authorized
before May 2005 after the issuance of the new retention incentive
regulations. The commenter observed that terminating retention
allowances seems counterproductive to the purpose of the allowances
which is to recruit and retain persons with unique skills.
Under section 101(d)(3) of Public Law 108-411 and Sec. 575.314 of
the regulations, retention allowances authorized before May 1, 2005,
were required to continue to be paid until the allowance was
reauthorized or terminated, but not later than April 30, 2006. Agencies
were required to pay such grandfathered retention allowances subject to
regulations applicable to retention allowances before May 1, 2005.
Under the former retention allowance regulations, agencies had the
flexibility to terminate retention allowances if a retention allowance
was not needed to retain the employee, labor-market factors made it
more likely to recruit a candidate with the qualifications possessed by
the employee, the agency's need for the employee's services was reduced
to a level that made paying an allowance unnecessary, or budgetary
considerations made it difficult to continue paying the allowance. When
a grandfathered retention allowance was terminated, an agency could
have authorized a new retention incentive in its place under the
conditions described in 5 CFR part 575, subpart C, as in effect
starting on May 13, 2005. Any decision to terminate a grandfathered
retention allowance before April 30, 2006 (the required termination
date under the statute), and whether to replace that allowance with a
new retention incentive was subject to agency discretion based on the
needs of the agency and the requirements of the retention incentive law
and regulations. We note that, by law, all grandfathered retention
allowances should have been terminated by April 30, 2006.
Additional Changes
We are making the following additional changes to the retention
incentive regulations to correct technical errors and make minor
clarifications:
Revising Sec. 575.307(a)(6)(iii) to remove the
requirement that agency retention incentive plans address the
obligations of an employee if an agency terminates a service agreement.
Because retention incentive payments are not paid in advance of an
employee fulfilling the period of service attributable to the payments,
employees do not have repayment obligations if a service agreement is
terminated.
Revising Sec. 575.307(b)(1) to clarify an authorized
agency official must review and approve each retention incentive before
paying an incentive to an employee.
Revising the examples in Sec. 575.309(c)(1) and (c)(2) to
clarify how the amount of pay an employee earned during the service
period is computed.
Revising Sec. 575.311 to clarify and make consistent the
conditions under which agencies have the discretion and are required to
terminate a retention incentive paid under a service agreement and a
retention incentive paid without a service agreement. We also are
adding a new paragraph to this section to clarify how to compute
retention incentive payments that may be owed to an employee for
completed service if an agency terminates a retention incentive service
agreement.
Finally, a number of commenters noted that the reference to
paragraph (g) in Sec. 575.310(a) should be changed to paragraph (f).
This error was corrected in the Federal Register notice published on
December 19, 2005 (70 FR 74995).
Miscellaneous Changes to Other Regulations
Commenters noted incorrect references to the special rate
regulations (5 CFR part 530, subpart C) in the aggregate limitation on
pay (5 CFR part 530, subpart B), supervisory differential (5 CFR part
575, subpart D), and extended assignment incentive (5 CFR part 575,
subpart E) regulations. A commenter also noted an incorrect reference
to the prevailing rate night differential authority at 5 U.S.C. 5343(f)
in the supervisory differential regulations. These references are
corrected in these final regulations.
We are revising the definition of discretionary payment in the
aggregate limitation on pay regulations at Sec. 530.202 to remove
``extended assignment incentives'' as an example of a discretionary
payment, consistent
[[Page 67837]]
with the removal of retention incentives as an example of a
discretionary payment in the interim regulations. We also are
clarifying the definition to provide payments that are authorized to an
employee under the terms of a service agreement are not discretionary
payments.
Also, to conform with the new Sec. Sec. 575.111(h) and 575.211(h)
and OPM's authority in 5 U.S.C. 5757(f) to prescribe regulations on an
employee's entitlement to retain extended assignment incentive payments
when an agreement is canceled, these final regulations add a new Sec.
575.513(g) to the extended assignment incentive regulations to provide
an authorized agency official with the authority to waive the
requirement under Sec. 575.513(b) and (c)(1) to repay excess extended
assignment incentive payments if an extended assignment incentive
service agreement is terminated when collection of the excess amount
would be against equity and good conscience and not in the best
interest of the United States. We are removing the reference to 5
U.S.C. 5584 in Sec. 575.513(c)(1) as the authority for waiving
recovery of such excess payments.
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with E.O. 12866.
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
will apply only to Federal agencies and employees.
List of Subjects in 5 CFR 530 and 575
Government employees, Reporting and recordkeeping requirements,
Wages.
Office of Personnel Management
Linda M. Springer,
Director.
0
Accordingly, OPM amends 5 CFR parts 530 and 575 as follows:
PART 530--PAY RATES AND SYSTEMS (GENERAL)
0
1. The authority citation for part 530 continues to read as follows:
Authority: 5 U.S.C. 5305 and 5307; subpart C also issued under 5
U.S.C. 5338 and sec. 4 of the Performance Management and Recognition
System Termination Act of 1993 (Pub. L. 103-89), 107 Stat. 981.
Subpart B--Aggregate Limitation on Pay
0
2. In Sec. 530.202, revise the first sentence in the definition of
basic pay and the definition of discretionary payment to read as
follows:
Sec. 530.202 Definitions.
* * * * *
Basic pay means the total amount of pay received at a rate fixed by
law or administrative action for the position held by an employee,
including any special rate under 5 CFR part 530, subpart C, or any
locality-based comparability payment under 5 CFR part 531, subpart F,
or other similar payment under other legal authority, before any
deductions. * * *
* * * * *
Discretionary payment means a payment an agency has discretion to
make to an employee. Payments that are authorized to be made to an
employee under the terms of a service agreement or preauthorized to be
made to an employee at a regular fixed rate each pay period are not
discretionary payments.
* * * * *
PART 575--RECRUITMENT, RELOCATION, AND RETENTION INCENTIVES;
SUPERVISORY DIFFERENTIALS; AND EXTENDED ASSIGNMENT INCENTIVES
0
3. The authority citation for part 575 continues to read as follows:
Authority: 5 U.S.C. 1104(a)(2) and 5307; subparts A and B also
issued under 5 U.S.C. 5753 and sec. 101 of the Federal Workforce
Flexibility Act of 2004, Public Law 108-411, 118 Stat. 2305; subpart
C also issued under 5 U.S.C. 5754 and sec. 101 of the Federal
Workforce Flexibility Act of 2004, Public Law 108-411, 118 Stat.
2305; subpart D also issued under 5 U.S.C. 5755; subpart E also
issued under 5 U.S.C. 5757 and sec. 207 of Public Law 107-273, 116
Stat. 1780.
Subpart A--Recruitment Incentives
0
4. In Sec. 575.102--
0
A. Revise the definition of employee,
0
B. Remove the definition of employee of the Federal Government,
0
C. Add a new definition of Federal Government, and
0
D. Revise paragraphs (2) and (3) in the definition of newly appointed.
The revisions and addition read as follows:
Sec. 575.102 Definitions.
* * * * *
Employee has the meaning given that term in 5 U.S.C. 2105, except
that the term also includes an employee described in 5 U.S.C. 2105(c).
For the purpose of determining whether an individual was an employee of
the Federal Government during the 90-day period referred to in the
definition of newly appointed, employee also includes an employee
described in 5 U.S.C. 2105(e). For the purpose of Sec. 575.109(d), an
employee means an individual not yet employed who has received a
written offer to be newly appointed or reappointed and has signed the
written service agreement required by Sec. 575.110 before payment of
the recruitment incentive.
* * * * *
Federal Government means all entities of the Government of the
United States, including the United States Postal Service and the
Postal Regulatory Commission.
* * * * *
Newly appointed refers to--* * *
(2) An appointment of a former employee of the Federal Government
following a break in Federal Government service of at least 90 days; or
(3) An appointment of an individual in the Federal Government when
his or her service in the Federal Government during the 90-day period
immediately preceding the appointment was limited to one or more of the
following:
(i) A time-limited appointment in the competitive or excepted
service;
(ii) A non-permanent appointment (excluding a Schedule C
appointment under 5 CFR part 213) in the competitive or excepted
service;
(iii) Employment with the government of the District of Columbia
(DC) when the candidate was first appointed by the DC government on or
after October 1, 1987;
(iv) An appointment as an expert or consultant under 5 U.S.C. 3109
and 5 CFR part 304;
(v) Employment under a provisional appointment designated under 5
CFR 316.403; or
(vi) Employment under the Student Career Experience Program under 5
CFR 213.3202(b).
* * * * *
0
5. In Sec. 575.103--
0
A. Redesignate paragraphs (a) through (g) as paragraphs (a)(1) through
(a)(7), respectively,
0
B. Designate the introductory sentence as paragraph (a) introductory
text and revise it, and
0
C. Add a new paragraph (b).
The revision and addition read as follows:
[[Page 67838]]
Sec. 575.103 Eligible categories of employees.
(a) Except as provided in Sec. 575.104, an Executive agency may
pay a recruitment incentive to an employee appointed or placed in the
following categories of positions:
* * * * *
(b) Except as provided in Sec. 575.104, a legislative agency may
pay a recruitment incentive to an employee appointed or placed in a
General Schedule position paid under 5 U.S.C. 5332 or 5305 (or similar
special rate authority).
0
6. In Sec. 575.105, add a new paragraph (c) to read as follows:
Sec. 575.105 Applicability to employees.
* * * * *
(c) An agency may not commence a recruitment incentive service
agreement during--
(1) A period of employment established under any service agreement
required for a relocation incentive under 5 CFR part 575, subpart B, or
(2) A period of employment established under any service agreement
required for a retention incentive or for which an employee receives
retention incentive payments without a service agreement under 5 CFR
part 575, subpart C.
0
7. In Sec. 575.106, revise paragraph (b)(1) to read as follows:
Sec. 575.106 Authorizing a recruitment incentive.
* * * * *
(b) * * *
(1) The availability and quality of candidates possessing the
competencies required for the position, including the success of recent
efforts to recruit candidates for the position or similar positions
using indicators such as offer acceptance rates, proportion of
positions filled, and the length of time required to fill similar
positions;
* * * * *
0
8. In Sec. 575.107, revise paragraphs (a)(1) and (b)(1) to read as
follows:
Sec. 575.107 Agency recruitment incentive plan and approval levels.
(a) * * *
(1) The designation of officials with authority to review and
approve payment of recruitment incentives (subject to paragraph (b) of
this section), including the circumstances under which an official has
the authority to approve payment without higher-level approval under
paragraph (b)(2) of this section, and the designation of officials with
authority to waive the repayment of a recruitment incentive under Sec.
575.111(h);
* * * * *
(b)(1) Except as provided in paragraph (b)(2) of this section, an
authorized agency official who is at least one level higher than the
employee's supervisor must review and approve each determination to pay
a recruitment incentive to a newly appointed employee, unless there is
no official at a higher level in the agency. The authorized agency
official must review and approve the recruitment incentive
determination before the agency may pay the incentive to the employee.
* * * * *
0
9. In Sec. 575.111--
0
A. Revise the first sentence and the last sentence in paragraph (f),
0
B. Remove the last sentence in paragraph (g), and
0
C. Add new paragraphs (h), (i), and (j).
The revision and additions read as follows:
Sec. 575.111 Termination of a service agreement.
* * * * *
(f) Except as provided in paragraph (j) of this section, if an
authorized agency official terminates a service agreement under
paragraph (b) of this section, the employee is entitled to retain
recruitment incentive payments previously paid by the agency that are
attributable to the completed portion of the service period. * * * If
the employee received recruitment incentive payments in excess of the
amount that would be attributable to the completed portion of the
service period, he or she must repay the excess amount, except when an
authorized agency official waives the requirement to repay the excess
amount under paragraph (h) of this section.
* * * * *
(h) If an employee received recruitment incentive payments in
excess of the amount that would be attributable to the completed
portion of the service period under paragraph (f) of this section, an
authorized agency official may waive the requirement to repay the
excess amount when, in the judgment of the official, collection of the
excess amount would be against equity and good conscience and not in
the best interest of the United States.
(i) The full amount of the authorized recruitment incentive must be
prorated across the length of the service period to determine the
amount of the recruitment incentive attributable to completed service
and uncompleted service under this section.
(j) Notwithstanding paragraph (f) of this section, if an agency
terminates a service agreement under paragraph (b) of this section when
an employee is separated as a result of material false or inaccurate
statements or deception or fraud in examination or appointment, or as a
result of failing to meet employment qualifications, the employee must
repay all recruitment incentive payments received under that service
agreement.
Subpart B--Relocation Incentives
0
10. In Sec. 575.202--
0
A. Revise the definition of employee,
0
B. Remove the definition of employee of the Federal Government, and
0
C. Add a new definition of Federal Government.
The revision and addition read as follows:
Sec. 575.202 Definitions.
* * * * *
Employee has the meaning given that term in 5 U.S.C. 2105, except
that the term also includes an employee described in 5 U.S.C. 2105(c).
For the purpose of determining whether an individual had status as an
employee of the Federal Government immediately prior to the relocation
(i.e., in Sec. 575.205(a)(2)), employee also includes an employee
described in 5 U.S.C. 2105(e).
* * * * *
Federal Government means all entities of the Government of the
United States, including the United States Postal Service and the
Postal Regulatory Commission.
* * * * *
0
11. In Sec. 575.203--
0
A. Redesignate paragraphs (a) through (g) as paragraphs (a)(1) through
(a)(7), respectively,
0
B. Designate the introductory sentence as paragraph (a) introductory
text and revise it, and
0
C. Add a new paragraph (b).
The revision and addition read as follows:
Sec. 575.203 Eligible categories of employees.
(a) Except as provided in Sec. 575.204, an Executive agency may
pay a relocation incentive to an employee in the following categories
of positions:
* * * * *
(b) Except as provided in Sec. 575.204, a legislative agency may
pay a relocation incentive to an employee in a General Schedule
position paid under 5 U.S.C. 5332 or 5305 (or similar special rate
authority).
0
12. In Sec. 575.205, revise paragraph (a) and add new paragraphs (d)
and (e) to read as follows:
[[Page 67839]]
Sec. 575.205 Applicability to employees.
(a) An agency may pay a relocation incentive under the conditions
prescribed in this subpart to an employee who--
(1) Relocates to a different geographic area (permanently or
temporarily) to accept a position listed in Sec. 575.203 in an agency
when the position is likely to be difficult to fill, as determined
under Sec. 575.206; and
(2) Is an employee of the Federal Government immediately before the
relocation.
* * * * *
(d) An agency may not commence a relocation incentive service
agreement during--
(1) A period of employment established under any service agreement
required for a recruitment incentive under 5 CFR part 575, subpart A,
or
(2) A period of employment established under any service agreement
required for a relocation incentive previously authorized under this
subpart.
(e) An agency may commence a relocation incentive service agreement
during a period of employment established under a service agreement for
a previously authorized retention incentive or for which an employee is
receiving previously authorized retention incentive payments without a
service agreement under 5 CFR part 575, subpart C. The service period
under such a relocation incentive service agreement and the service
period required by the retention incentive service agreement, if
applicable, must be fulfilled concurrently.
0
13. In Sec. 575.206, revise paragraphs (a)(4) and (b)(1) to read as
follows:
Sec. 575.206 Authorizing a relocation incentive.
(a) * * *
(4) Request a waiver from OPM of the limitation on the maximum
amount of a relocation incentive under Sec. 575.209(c); and
* * * * *
(b) * * *
(1) The availability and quality of candidates possessing the
competencies required for the position, including the success of recent
efforts to recruit candidates for the position or similar positions
using indicators such as offer acceptance rates, proportion of
positions filled, and the length of time required to fill similar
positions;
* * * * *
0
14. In Sec. 575.207, revise paragraphs (a)(1) and (b)(1) to read as
follows:
Sec. 575.207 Agency relocation incentive plan and approval levels.
(a) * * *
(1) The designation of officials with authority to review and
approve payment of relocation incentives (subject to paragraph (b) of
this section) and the designation of officials with authority to waive
the repayment of a relocation incentive under Sec. 575.211(h);
* * * * *
(b)(1) Except as provided in paragraph (b)(2) of this section, an
authorized agency official who is at least one level higher than the
employee's supervisor must review and approve each determination to pay
a relocation incentive, unless there is no official at a higher level
in the agency. The authorized agency official must review and approve
the relocation incentive determination before the agency pays the
incentive to the employee.
* * * * *
0
15. In Sec. 575.210(e), revise the second sentence to read as follows:
Sec. 575.210 Service agreement requirements.
* * * * *
(e) * * * The service agreement must specify the effect of the
termination under Sec. 575.211, including the conditions under which
the agency will pay an additional relocation incentive payment for
partially completed service under Sec. 575.211(e) and (f).
* * * * *
0
16. In Sec. 575.211--
0
A. Revise the last sentence in paragraph (f),
0
B. Remove the last sentence in paragraph (g), and
0
C. Add new paragraphs (h) and (i).
The revision and additions read as follows:
Sec. 575.211 Termination of a service agreement.
* * * * *
(f) * * * If the employee received relocation incentive payments in
excess of the amount that would be attributable to the completed
portion of the service period, he or she must repay the excess amount,
except when an authorized agency official waives the requirement to
repay the excess amount under paragraph (h) of this section.
* * * * *
(h) If an employee received relocation incentive payments in excess
of the amount that would be attributable to the completed portion of
the service period under paragraph (f) of this section, an authorized
agency official may waive the requirement to repay the excess amount
when, in the judgment of the official, collection of the excess amount
would be against equity and good conscience and not in the best
interest of the United States.
(i) The full amount of the authorized relocation incentive must be
prorated across the length of the service period to determine the
amount of the relocation incentive attributable to completed service
and uncompleted service under this section.
Subpart C--Retention Incentives
0
17. In Sec. 575.303--
0
A. Redesignate paragraphs (a) through (g) as paragraphs (a)(1) through
(a)(7), respectively,
0
B. Designate the introductory sentence as paragraph (a) introductory
text and revise it, and
0
C. Add a new paragraph (b).
The revision and addition read as follows:
Sec. 575.303 Eligible categories of employees.
(a) Except as provided in Sec. 575.304, an Executive agency may
pay a retention incentive to a current employee who holds--
* * * * *
(b) Except as provided in Sec. 575.304, a legislative agency may
pay a retention incentive to a current employee who holds a General
Schedule position paid under 5 U.S.C. 5332 or 5305 (or similar special
rate authority).
0
18. In Sec. 575.307, revise paragraph (a)(6)(iii) and add a new
sentence at the end of paragraph (b)(1) to read as follows:
Sec. 575.307 Agency retention incentive plan and approval levels.
(a) * * *
(6) * * *
(iii) The obligations of the agency if the agency terminates a
service agreement; and
* * * * *
(b)(1) * * * The authorized agency official must review and approve
the retention incentive determination before the agency pays the
incentive to the employee.
* * * * *
0
19. In Sec. 575.309--
0
A. Revise the fourth sentence in paragraph (c)(1) and the fourth
sentence in paragraph (c)(2),
0
B. Add four new sentences at the end of paragraph (d), and
0
C. Revise paragraph (g).
The revisions and additions read as follows:
Sec. 575.309 Payment of retention incentives.
* * * * *
[[Page 67840]]
(c)(1) * * * The employee earns $15,000 during the 6 pay periods of
service ($2,500 biweekly rate of basic pay x 6). * * *
(2) * * * The employee earns $15,000 during the 6 pay periods of
service ($2,500 biweekly rate of basic pay x 6). * * *
* * * * *
(d) * * * For example, an agency establishes a retention incentive
percentage rate of 10 percent for an employee. The employee has a
service agreement that provides for a single lump-sum retention
incentive payment after completion of the full service period required
by the service agreement (i.e., 26 pay periods). The employee earns
$65,000 during the 26 pay periods of service ($2,500 biweekly rate of
basic pay x 26). Upon completion of the full service period, the
employee will receive a single lump-sum retention incentive payment of
$6,500 ($65,000 x .10).
* * * * *
(g) An agency may not commence a group or individual retention
incentive service agreement or provide a group or individual retention
incentive without a service agreement under Sec. 575.310(f) for any
biweekly pay period during--
(1) A period of employment established under any service agreement
required for the payment of a recruitment incentive under 5 CFR part
575, subpart A, or a relocation incentive under 5 CFR part 575, subpart
B, (see 5 CFR 575.205(e) regarding the authority to commence a
relocation incentive service agreement during a period of employment
established under a service agreement for a previously authorized
retention incentive or for which an employee is receiving previously
authorized retention incentive payments without a service agreement);
or
(2) A period of employment established under a service agreement
for a previously authorized retention incentive or for which an
employee is receiving a previously authorized retention incentive
without a service agreement under Sec. 575.310(f) (including a group
retention incentive with or without a service agreement).
* * * * *
0
20. Revise Sec. 575.311 to read as follows:
Sec. 575.311 Continuation, reduction, and termination of retention
incentives.
(a)(1) An authorized agency official must terminate a retention
incentive service agreement when conditions change such that the
original determination to pay the retention incentive no longer applies
(e.g., when the agency assigns the employee to a different position
that is not within the terms of the service agreement) or when payment
is no longer warranted after considering factors such as--
(i) Whether a retention incentive is needed to retain the employee
(or group of employees),
(ii) Whether labor-market factors make it more likely (or
reasonably likely) to recruit a candidate with competencies similar to
those possessed by the employee (or group of employees), or
(iii) Whether the agency's need for the services of the employee
(or group or category of employees) has been reduced to a level that
makes it unnecessary to continue paying a retention incentive.
(2) An authorized agency official may terminate unilaterally a
retention incentive service agreement based solely on the management
needs of the agency, even if the conditions giving rise to the original
determination to pay the incentive still exist. For example, an agency
may terminate a service agreement when there are insufficient funds to
continue the planned retention incentive payments.
(b) An authorized agency official must terminate a retention
incentive service agreement when--
(1) The employee is demoted or separated for cause (i.e., for
unacceptable performance or conduct);
(2) The employee receives a rating of record (or an official
performance appraisal or evaluation under a system not covered by 5
U.S.C. chapter 43 or 5 CFR part 430) of less than ``Fully Successful''
or equivalent; or
(3) The employee otherwise fails to fulfill the terms of the
service agreement.
(c) If an authorized agency official terminates a service agreement
under paragraph (a) of this section, the employee is entitled to retain
any retention incentive payments that are attributable to completed
service and to receive any portion of a retention incentive payment
owed by the agency for completed service.
(d) If an authorized agency official terminates a service agreement
under paragraph (b) of this section, the employee is entitled to retain
retention incentive payments previously paid by the agency that are
attributable to the completed portion of the service period. If the
employee received retention incentive payments that are less than the
amount that would be attributable to the completed portion of the
service period, the agency is not obligated to pay the employee the
amount attributable to completed service, unless the agency agreed to
such payment under the terms of the retention incentive service
agreement.
(e) To determine the amount of retention incentive payments that
may be owed to an employee for completed service under paragraphs (c)
and (d) of this section, multiply the total rate of basic pay the
employee earned during the completed portion of the service period by
the retention incentive percentage rate established for the employee
under Sec. 575.309(a) and subtract the amount of retention incentive
payments already paid to the employee from this product. The difference
is the amount owed to the employee for completed service.
(f)(1) For retention incentives that are paid when no service
agreement is required under Sec. 575.310(f), an agency must review
each determination to pay the incentive at least annually to determine
whether payment is still warranted. An authorized agency official must
certify this determination in writing.
(2) An agency may continue paying a retention incentive to an
employee when no service agreement is required as long as the
conditions giving rise to the original determination to pay the
incentive still exist.
(3) An authorized agency official must reduce or terminate a
retention incentive authorization when no service agreement is required
whenever conditions change such that the original determination to pay
the retention incentive no longer applies (e.g., when the agency
assigns the employee to a different position that is not within the
terms of the original determination) or when payment is no longer
warranted at the level originally approved or at all after considering
factors such as--
(i) Whether a lesser amount (or none at all) would be sufficient to
retain the employee (or group or category of employees);
(ii) Whether labor-market factors make it more likely (or
reasonably likely) to recruit a candidate with competencies similar to
those possessed by the employee (or group or category of employees); or
(iii) Whether the agency's need for the services of the employee
(or group or category of employees) has been reduced to a level that
makes it unnecessary to continue payment at the level originally
approved (or at all).
(4) An authorized agency official may terminate unilaterally a
retention incentive authorization when no service agreement is required
based solely on the management needs of the agency, even if the
conditions giving rise to the original determination to pay the
[[Page 67841]]
incentive still exist. For example, an agency may terminate a retention
incentive when there are insufficient funds to continue the planned
retention incentive payments.
(5) An authorized agency official must terminate a retention
incentive authorization when no service agreement is required when--
(i) The employee is demoted or separated for cause (i.e., for
unacceptable performance or conduct), or
(ii) The employee receives a rating of record (or an official
performance appraisal or evaluation under a system not covered by 5
U.S.C. chapter 43 or 5 CFR part 430) of less than ``Fully Successful''
or equivalent.
(g) The termination of a retention incentive service agreement or
the reduction or termination of a retention incentive under this
section is not grievable or appealable.
(h) If an agency terminates a retention incentive service agreement
or reduces or terminates a retention incentive paid without a service
agreement under this section, the agency must notify the employee in
writing. When a retention incentive is terminated under paragraph (f)
of this section, the employee is entitled to receive any scheduled
incentive payments through the end of the pay period in which the
written notice is provided or until the date of separation, if sooner.
Subpart D--Supervisory Differentials
0
21. In Sec. 575.402, revise paragraph (b) to read as follows:
Sec. 575.402 Delegation of authority.
* * * * *
(b) A supervisory differential may not be paid on the basis of
supervising a civilian employee whose rate of basic pay exceeds the
maximum rate of basic pay established for grade GS-15 on the pay
schedule applicable to the GS supervisor, including a schedule for any
applicable special rate under 5 CFR part 530, subpart C; locality-based
comparability payment under 5 CFR part 531, subpart F; or similar
payment or supplement under other legal authority.
* * * * *
0
22. In Sec. 575.403, revise the definition of rate of basic pay to
read as follows:
Sec. 575.403 Definitions.
* * * * *
Rate of basic pay means the rate of pay fixed by law or
administrative action for the position to which the employee is or will
be appointed before deductions and including any special rate under 5
CFR part 530, subpart C; locality-based comparability payment under 5
CFR part 531, subpart F; or similar payment or supplement under other
legal authority, but excluding additional pay of any other kind. For
example, rate of basic pay excludes a night differential under 5 U.S.C.
5343(f), an environment differential under 5 U.S.C. 5343(c)(4), or a
similar payment under other legal authority.
* * * * *
0
23. Revise Sec. 575.405(d)(1) to read as follows:
Sec. 575.405 Calculation and payment of supervisory differential.
* * * * *
(d) * * *
(1) Basic pay, excluding a night or environmental differential
under 5 U.S.C. 5343(f) or 5343(c)(4), respectively, or similar payment
under other legal authority;
* * * * *
Subpart E--Extended Assignment Incentives
0
24. In Sec. 575.502, revise the first sentence in the definition of
rate of basic pay to read as follows:
Sec. 575.502 Definitions.
* * * * *
Rate of basic pay means the rate of pay fixed by law or
administrative action for the position held by an employee, including
any special rate under 5 CFR part 530, subpart C; locality-based
comparability payment under 5 CFR part 531, subpart F; or similar
payment under other legal authority, but before deductions and
exclusive of additional pay of any other kind. * * *
* * * * *
0
25. In Sec. 575.513--
0
A. Revise paragraph (b) introductory text,
0
B. Revise paragraph (c)(1),
0
C. Remove the last sentence in paragraph (f), and
0
D. Add a new paragraph (g).
The revisions and addition read as follows:
Sec. 575.513 What are the agency's and the employee's obligations
when an employee fails to fulfill the terms of a service agreement?
* * * * *
(b) Except as provided in paragraph (g) of this section, an
employee is indebted to the Federal Government and must repay the
paying agency for an appropriate portion of an extended assignment
incentive received by the employee if--
* * * * *
(c)(1) If an employee does not fulfill the terms of a service
agreement under the circumstances prescribed in paragraph (b) of this
section and has received incentive payments whose value as a percentage
of the planned total sum of incentive payments for the entire service
period exceeds the percentage reflecting the portion of the service
period completed by the employee, he or she must repay the excess
payment and any additional repayment penalty imposed by the agency
under paragraph (e) of this section, except when an authorized agency
official waives the requirement to repay the excess amount under
paragraph (g) of this section.
* * * * *
(g) If an employee received extended assignment incentive payments
in excess of the amount that would be attributable to the completed
portion of the service period under paragraph (c) of this section, an
authorized agency official may waive the requirement to repay the
excess amount when, in the judgment of the official, collection of the
excess amount would be against equity and good conscience and not in
the best interest of the United States.
[FR Doc. E7-23411 Filed 11-30-07; 8:45 am]
BILLING CODE 6325-39-P