Recruitment, Relocation, and Retention Incentives, 25732-25752 [05-9550]

Agencies

• Office of Personnel Management
• Personnel Management Office

[Federal Register Volume 70, Number 92 (Friday, May 13, 2005)]
[Rules and Regulations]
[Pages 25732-25752]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 05-9550]



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Part VII





Office of Personnel Management





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5 CFR Parts 530 and 575



Recruitment, Relocation, and Retention Incentives; Final Rules

Federal Register / Vol. 70, No. 92 / Friday, May 13, 2005 / Rules and 
Regulations

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OFFICE OF PERSONNEL MANAGEMENT

5 CFR PARTS 530 and 575

RIN 3206-AK81


Recruitment, Relocation, and Retention Incentives

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

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SUMMARY: The Office of Personnel Management is issuing interim 
regulations to implement a provision of the Federal Workforce 
Flexibility Act of 2004 to provide agencies with the authority to pay 
recruitment, relocation, and retention incentives to employees. The new 
authorities will provide agencies with additional flexibility to help 
recruit and retain employees and better meet agency strategic human 
capital needs. The new authorities replace the former recruitment and 
relocation bonus and retention allowance authorities that applied to 
General Schedule and other categories of Federal employees.

DATES: Effective Date: The interim regulations will become effective on 
May 13, 2005.
    Applicability Date: The interim regulations apply to recruitment 
and relocation incentives authorized under 5 U.S.C. 5753 and retention 
incentives authorized under 5 U.S.C. 5754 on the first day of the first 
pay period beginning on or after May 13, 2005.
    Comment Date: Comments must be received on or before July 12, 2005.

ADDRESSES: Send or deliver written comments to Donald J. Winstead, 
Deputy Associate Director for Pay and Performance Policy, Division for 
Strategic Human Resources Policy, Office of Personnel Management, Room 
7H31, 1900 E Street, NW., Washington, DC 20415-8200; by fax at (202) 
606-0824, or by e-mail at pay-performance-policy@opm.gov.

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: The Office of Personnel Management (OPM) is 
issuing interim regulations to implement section 101 of the Federal 
Workforce Flexibility Act of 2004 (Pub. L. 108-411, October 30, 2004). 
Section 101 amends 5 U.S.C. 5753 and 5754 by providing a new authority 
to make recruitment, relocation, and retention payments. The amended 
law replaces the former authority provided by 5 U.S.C. 5753 and 5754. 
These interim regulations replace existing regulations at 5 CFR part 
575, subparts A, B, and C, to pay recruitment and relocation bonuses 
and retention allowances. To differentiate these kinds of payments--
which are designed to provide a monetary incentive for an individual or 
group to accept a new position or to remain employed in the current 
position(s), as opposed to rewarding an individual or group for quality 
of performance (the typical context in which the term ``bonus'' is 
used)--these interim regulations use the term ``incentive'' in place of 
``bonus.'' These interim regulations also build on the flexibilities 
provided by the former authority to provide agencies with additional, 
enhanced authority to pay recruitment, relocation, and retention 
incentives to employees to address recruitment and retention problems 
and better meet agency strategic human capital needs.

Overall Authority

    These interim regulations provide agencies with the authority to 
pay--
     Recruitment incentives under 5 CFR part 575, subpart A, to 
an employee newly appointed to a position that is likely to be 
difficult to fill in the absence of an incentive;
     Relocation incentives under 5 CFR part 575, subpart B, to 
a current employee who must relocate to a new geographic area to accept 
a position that is likely to be difficult to fill in the absence of an 
incentive; and
     Retention incentives under 5 CFR part 575, subpart C, to a 
current employee with unusually high or unique qualifications or when 
there is a special need of the agency for the employee's services that 
makes it essential to retain the employee and when the agency 
determines that the employee would be likely to leave the Federal 
service in the absence of an incentive.

Payments to Current Employees in Interagency Movements

    Section 101 of the Act amended 5 U.S.C. 5753(b) to allow OPM to 
authorize the head of an agency to pay a recruitment incentive to a 
current employee (of the same or a different agency) who moves to a 
position in the same geographic area that is likely to be difficult to 
fill in the absence of an incentive under circumstances described in 
OPM's regulations. Similarly, 5 U.S.C. 5754 was amended to allow OPM to 
authorize the head of an agency to pay a retention incentive to a 
current employee who would be likely to leave his or her position for a 
different position in the Federal service in the absence of a retention 
incentive under conditions described in OPM's regulations. Congress 
requested OPM to monitor the use of recruitment and retention 
incentives under these circumstances to ensure that they are an 
effective use of the Federal Government's funds and do not adversely 
affect the ability of those Government agencies that lose employees to 
other Government agencies to carry out their mission. The law provides 
that agencies should notify OPM within 60 days after the date a 
recruitment or retention incentive is authorized under these 
circumstances.
    OPM recognizes that costly and inefficient interagency competition 
could occur if agencies are permitted to authorize recruitment and 
retention incentives to encourage employees to move from other agencies 
or to discourage employees from moving to other agencies. We have 
discussed this issue with the Chief Human Capital Officers (CHCO) 
Council and have agreed that, before OPM issues any rules providing 
agencies with the authority to pay recruitment and retention incentives 
to current employees in interagency movements, we will invite comments 
from interested parties on whether an agency should be permitted to 
authorize a recruitment incentive to recruit an employee from another 
agency or to authorize a retention incentive to retain an employee 
likely to leave for another Federal position and, if so, the specific 
circumstances in which such incentives should be authorized. Therefore, 
these interim regulations do not provide agencies with the authority to 
pay recruitment or retention incentives to current employees in 
interagency movements.
    OPM invites comments on whether, in view of the potential for 
costly and inefficient interagency competition, it would be appropriate 
to authorize a recruitment incentive for a current employee who moves 
to another Federal position in the same geographic area that is likely 
to be difficult to fill. Specifically--
     Would it be desirable to allow an agency to offer a 
recruitment incentive to a current employee (of the same or a different 
Federal agency) when the head of the agency initiating the recruitment 
action determines that the unique competencies (i.e., knowledge, 
skills, abilities, behaviors, and other characteristics) possessed by 
the employee are critical to the successful accomplishment of an 
important agency mission?

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     Would it be desirable to allow an agency to offer a 
recruitment incentive to a current employee (of the same or a different 
Federal agency) when the offered position is under a pay system that 
differs from the pay system of the employee's position before the move 
and the head of that agency determines that the employee's service in 
the new position is critical to the successful accomplishment of an 
important agency mission?
     Would it be desirable to allow the head of an agency to 
offer a recruitment incentive to a current employee (of the same or a 
different Federal agency) when the employee is changing career fields 
by moving to a position in an occupational series that is part of an 
occupational group other than the occupational group of the employee's 
position immediately before the move (e.g., a program analyst (0343) 
moving to an information technology specialist (security (2210) 
position)?
    Likewise, we invite comments on whether, in view of the potential 
for costly and inefficient interagency competition, it would be 
appropriate to offer a retention incentive to a current employee who 
would be likely to leave his or her position for a different position 
in the Federal service in the absence of such an incentive. 
Specifically--
     Would it be desirable to allow an agency to offer a 
retention incentive to a current employee when the head of that agency 
determines that the loss of the employee's unique competencies (i.e., 
knowledge, skills, abilities, behaviors, and other characteristics) 
required for the position would adversely affect the successful 
accomplishment of an important agency mission or the completion of a 
critical project?
     Would it be desirable to allow an agency to offer a 
retention incentive to a current employee when the offered position is 
under a pay system that differs from the pay system of the employee's 
position before the move and the head of that agency determines that 
the loss of the employee in the current position would adversely affect 
the successful accomplishment of an important agency mission or the 
completion of a critical project?
     Would it be desirable to allow an agency to offer a 
retention allowance when the employee's position requires him or her to 
work under unusually severe or arduous working conditions (e.g., an 
extreme climate; unreliable essential services, such as basic utility 
or telecommunication services; or other harsh conditions) that the 
agency cannot control and the head of that agency has determined that 
these conditions have a significant negative effect on the agency's 
ability to retain that employee at the worksite?
     Would it be desirable to allow an agency to offer a 
retention incentive to a current employee in order to retain an 
employee who is likely to leave his or her position for another Federal 
position before the closure or relocation of the employee's office or 
facility and the head of that agency has determined that the employee's 
services are critical to the successful closure or relocation?
    OPM also invites comments on whether we should limit the payment of 
a recruitment or retention incentive in any of the circumstances listed 
in this section of the Supplementary Information to only those 
employees whose rating of record is at the highest level under the 
applicable performance appraisal or evaluation system.

Requirements Applicable to Recruitment, Relocation, and Retention 
Incentives

    The regulations governing each of the recruitment, relocation, and 
retention incentive authorities are provided in separate subparts of 5 
CFR part 575, as discussed later in this Supplementary Information. In 
addition to these interim regulations, OPM will issue guidance to 
implement the new recruitment, relocation, and retention incentive 
authorities. The following requirements are similar for all of the new 
recruitment, relocation, and retention authorities:

Covered Employees

    Under 5 U.S.C. 5753(a)(1) and 5754(a)(1), the new recruitment, 
relocation, and retention incentive authorities may be applied to 
employees covered by the General Schedule (GS) pay system or to 
employees in a category approved by OPM for coverage at the request of 
the head of an Executive agency. OPM has decided to extend coverage 
under the new recruitment, relocation, and retention incentive 
authorities to those categories of employees that were previously 
approved for coverage under the former recruitment, relocation, and 
retention authorities, except when otherwise excluded. (See Employees 
not covered in this Supplementary Information.) As under the former 
recruitment, relocation, and retention regulations, Sec. Sec.  575.103, 
575.203, and 575.303 of these interim regulations provide that 
employees in the following categories of positions are eligible for 
recruitment, relocation, and retention incentives:
     A GS position paid under 5 U.S.C. 5332 or 5305 (or similar 
special rate authority);
     A senior-level (SL) or scientific or professional (ST) 
position paid under 5 U.S.C. 5376;
     A Senior Executive Service (SES) position paid under 5 
U.S.C. 5383 or a Federal Bureau of Investigation and Drug Enforcement 
Administration (FBI/DEA) SES position paid under 5 U.S.C. 3151;
     A position as a law enforcement officer, as defined in 5 
CFR 550.103;
     A position under the Executive Schedule paid under 5 
U.S.C. 5311-5317 or a position the rate of pay for which is fixed by 
law at a rate equal to a rate for the Executive Schedule; and
     A prevailing rate position, as defined in 5 U.S.C. 
5342(a)(3).
    Sections 575.103, 575.203, and 575.303 of these interim regulations 
also provide the head of an Executive agency with the discretionary 
authority to request that OPM approve coverage of other categories of 
employees. Employees in a requested category must be in an Executive 
agency (as defined in 5 U.S.C. 105) and meet the definition of employee 
under 5 U.S.C. 2105 (including an employee paid from nonappropriated 
funds who is covered by 5 U.S.C. 2105(c)). However, agencies do not 
need to request coverage of a category of employees under the new 
recruitment, relocation, and retention incentive authorities if OPM 
previously approved that category for coverage under the former 
authorities. Coverage of such employee categories under the new 
authorities will continue unless otherwise requested by the head of an 
Executive agency or excluded by the regulations. OPM will separately 
notify agencies regarding the coverage of such employee categories.

Employees Not Covered

    Sections 5753(a)(2) and 5754(a)(2) of title 5, United States Code, 
prohibit the payment of recruitment, relocation, and retention 
incentives to employees in--
     A position to which an individual is appointed by the 
President, by and with the advice and consent of the Senate;
     A position in the SES as a noncareer appointee (as defined 
in 5 U.S.C. 3132(a)(7)); or
     A position excepted from the competitive service by reason 
of its confidential, policy-determining, policy-making, or policy-
advocating character.
    In addition, these interim regulations prohibit recruitment, 
relocation, and retention incentives for employees in positions to 
which an individual is

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appointed by the President without the advice and consent of the 
Senate. (See Sec. Sec.  575.104, 575.204, and 575.304.) For example, 
certain Executive Schedule Presidential appointees who do not otherwise 
fall into the other excluded categories are prohibited from receiving 
new recruitment, relocation, and retention incentives under this 
additional exclusion. As with the former authorities, the interim 
regulations also prohibit an employee in a position designated as the 
head of an agency, including an agency headed by a collegial body 
composed of two or more individual members and an employee appointed to 
a position in the expectation of receiving an appointment as the head 
of an agency, from receiving recruitment, relocation, and retention 
incentives.

Authorization of Recruitment, Relocation, and Retention Incentives

    An authorized agency official may (1) determine whether an employee 
meets the statutory requirements for receiving a recruitment, 
relocation, or retention incentive; (2) approve an incentive for an 
employee; (3) establish the criteria for determining the amount of an 
incentive payment, method of payment, and length of a required service 
period; and (4) establish the criteria for terminating a service 
agreement and any obligations of the agency and employee when a service 
agreement is terminated. (See Sec. Sec.  575.106, 575.206, and 
575.306.)

Recruitment, Relocation, and Retention Incentive Plans and Approval 
Levels

    Under 5 U.S.C. 5753(f) and 5754(g) and Sec. Sec.  575.107, 575.207, 
and 575.307, an agency must establish a separate plan for each of the 
new recruitment, relocation, and retention incentives authorities. 
However, the agency may establish an overall policy for using 
recruitment, relocation, and retention incentives that addresses the 
criteria, options, and requirements that apply to all three incentives, 
but also includes separate plans that provide detailed information on 
the unique features of each of the recruitment, relocation, and 
retention incentive authorities. The agency's policy must include the 
designation of officials with authority to approve the incentives, the 
categories of employees who are prohibited from receiving incentives, 
requirements for determining the amount of an incentive and the payment 
method, requirements governing service agreements, and documentation 
and recordkeeping requirements. In the interest of ensuring internal 
equity and consistency, the interim regulations require that such plans 
apply uniformly across the agency (unless the agency head in his or her 
sole and exclusive discretion determines otherwise, subject only to OPM 
review and oversight).
    An authorized agency official who is at least one level higher than 
the employee's supervisor is authorized to approve a recruitment, 
relocation, and retention incentive for eligible employees, unless 
there is no official at a higher level in the agency. Sections 
575.107(b), 575.207(b), and 575.307(b) provide certain additional 
exceptions to the higher-level review and approval requirement.

Requirements for Approving Incentives

    Each of the recruitment, relocation, and retention incentive 
authorities has separate criteria for authorization of an incentive, 
but shares a new criterion--namely, that eligible employees must have 
or maintain a rating of record of at least ``Fully Successful'' or 
equivalent to receive a recruitment, relocation, or retention 
incentive, as applicable. (See Sec. Sec.  575.111(b), 575.205(c), 
575.211(b), 575.305(d), and 575.311(b) and (g)(4).)
    In determining whether to authorize an incentive, agencies must 
consider a number of factors, as applicable to the case at hand. For 
example, agencies must consider employment trends and labor-market 
factors, non-Federal salaries paid for similar positions, special or 
unique competencies required for the position, agency efforts to use 
non-pay authorities, and the desirability of the duties, work or 
organizational environment, or location of the position.
    For each determination to pay a recruitment, relocation, or 
retention incentive, an agency must document in writing the basis for 
the approval of the incentive, the amount and timing of the incentive 
payment, and the length of the required service period.

Recruitment, Relocation, and Retention Incentive Payments

    The interim regulations require agencies to use an employee's 
special rate or locality rate of pay, as applicable, to compute 
recruitment, relocation, and retention incentive payments. (Agencies 
were prohibited from using locality rates for this purpose under the 
former recruitment, relocation, and retention authorities.) Sections 
575.102, 575.202, and 575.302 of the regulations define rate of basic 
pay to include a special rate under 5 CFR part 530, subpart C, or 
similar payment under other legal authority and a locality-based 
comparability payment under 5 CFR part 531, subpart F, or similar 
payment under other legal authority. The definition of rate of basic 
pay excludes additional pay of any other kind, including night shift 
differentials under 5 U.S.C. 5343(f) or environmental differentials 
under 5 U.S.C. 5343(c)(4) for Federal Wage System employees.
    Under 5 U.S.C. 5753(d)(3) and 5754(e)(3) and Sec. Sec.  575.109(e), 
575.209(d), and 575.309(h) of these interim regulations, recruitment, 
relocation, and retention incentive payments are not considered part of 
basic pay for any purpose. In addition, Sec. Sec.  575.109(f), 
575.209(e), and 575.309(i) provide that payment of recruitment, 
relocation, and retention incentives is subject to the aggregate 
limitation on pay under 5 U.S.C. 5307 and 5 CFR part 530, subpart B. 
(See also the discussion on the aggregate limitation on pay under the 
``Retention Incentives'' section of this Supplementary Information.)
    The law and these interim regulations prescribe the limitations on 
the maximum amount of recruitment, relocation, and retention incentives 
payments that may be paid to an employee. (See the maximum incentive 
payments that agencies may authorize under ``Recruitment Incentives'' 
and ``Retention Incentives'' later in this Supplementary Information.) 
Under 5 U.S.C. 5753(e) and 5754(f), and Sec. Sec.  575.109(c), 
575.209(c), and 575.309(e), an authorized agency official may request 
that OPM waive these limitations based on a critical agency need. In 
addition to determining whether the situation meets the regular 
approval criteria, the authorized agency official must determine that 
the competencies required for the position are critical to the 
successful accomplishment of an important agency mission, project, or 
initiative (e.g., programs or projects related to a national emergency 
or implementing a new law or critical management initiative). (Note: 
The term competencies is defined in all three subparts of these interim 
regulations as ``the knowledge, skills, abilities, behaviors, and other 
characteristics an [individual or] employee needs to perform the duties 
of a position.'' See Sec. Sec.  575.102, 575.202, and 575.302.)

Service Agreements

    Under 5 U.S.C. 5753(c) and 5754(d) and Sec. Sec.  575.110, 575.210, 
and 575.310, before paying a recruitment, relocation, or retention 
incentive, an agency must require the employee to sign a written 
service agreement to complete a specified period of employment with the 
agency. (A service agreement is not required when an agency pays an 
employee a retention incentive in biweekly installments of equal 
amounts. See 5 U.S.C. 5754(d)(3)(A) and Sec.  575.310(f).)

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    A service agreement for a recruitment, relocation, or retention 
incentive must specify the length of the service period, the amount of 
the incentive, the method and timing of incentive payments (e.g., lump-
sum payment and/or installments), the conditions under which an 
agreement may be terminated by the agency, any agency or employee 
obligations if a service agreement is terminated, and any other terms 
and conditions for receiving and retaining incentive payments.
    The required service period for a recruitment incentive may not be 
less than 6 months. There is no minimum service period for a relocation 
or retention incentive. The maximum service period for a recruitment or 
relocation incentive may not exceed 4 years. There is no maximum 
service period for a retention incentive.
    The service agreement must specify the commencement date and 
termination date of the required service period. The regulations 
require that recruitment, relocation, and retention incentive service 
agreements begin on the first day of a pay period and end on the last 
day of a pay period. In addition, Sec. Sec.  575.110(b)(3) and 
575.210(b)(3) provide agencies with the discretionary authority to 
delay the commencement date of a recruitment or relocation incentive 
service agreement until after the employee completes an initial period 
of formal training or after a probationary period. (See 5 U.S.C. 
5753(c)(2)(C).)

Termination of Service Agreement

    An authorized agency official may unilaterally terminate a 
recruitment, relocation, or retention incentive service agreement based 
on the management needs of the agency. For example, an agency may 
terminate a service agreement when the employee's position is affected 
by a reduction in force, when there are insufficient funds to continue 
the planned incentive payments, or when the agency assigns the employee 
to a different position (if the different position is not within the 
terms of the service agreement). An agency must terminate a service 
agreement if an employee is demoted or separated for cause (i.e., for 
unacceptable performance or conduct), if the employee receives a rating 
of record lower than ``Fully Successful'' or equivalent during the 
service period, or if the employee otherwise fails to fulfill the terms 
of the service agreement.
    If an authorized agency official terminates a service agreement 
based on the management needs of the agency, the agency must pay any 
recruitment, relocation, or retention incentive payments attributable 
to completed service. If an authorized agency official terminates a 
service agreement because of the employee's unacceptable performance or 
conduct, the employee receives a rating of record of lower than ``Fully 
Successful'' or equivalent, or the employee fails to fulfill the terms 
of the service agreement, the employee will retain any recruitment, 
relocation, or retention incentives that are attributable to completed 
service; receive unpaid recruitment, relocation, or retention 
incentives that are attributable to completed service only if approved 
by the agency under the terms of the service agreement; and must 
reimburse the Federal Government for any recruitment or relocation 
incentive payments received that are attributable to uncompleted 
service. While the head of an agency may waive any debt owed to the 
Federal Government under 5 U.S.C. 5584, if warranted, waivers should be 
rare because the employee agreed to the repayment conditions when he or 
she signed the service agreement. See Sec. Sec.  575.111, 575.211, and 
575.311 for additional information on terminating service agreements.

Recruitment Incentives

    Under 5 U.S.C. 5753(b)(2)(A) and (B) and Sec.  575.105 of these 
interim regulations, an agency may pay a recruitment incentive to an 
individual who is newly appointed as an employee of the Federal 
Government to a position the agency has determined is likely to be 
difficult to fill in the absence of a recruitment incentive. This 
determination must be made on an individual, case-by-case basis before 
the employee enters on duty. An agency may target groups of positions 
and make this determination on a group basis.

Difficult To Fill

    Under Sec.  575.106, an agency may determine that a position is 
likely to be difficult to fill if--
     The agency is likely to have difficulty recruiting 
qualified candidates with the competencies required for a position (or 
group of positions) in the absence of a recruitment incentive, 
considering the factors in Sec.  575.106(b); or
     OPM has approved the use of a direct-hire authority under 
5 CFR part 337, subpart B, for the position (or group of positions).

Newly-Appointed Employees

    An agency may pay a recruitment incentive to an individual who is 
newly appointed as an employee of the Federal Government. Under Sec.  
575.102 of the recruitment incentive regulations, newly appointed 
refers to--
     The first appointment, regardless of tenure, as an 
employee of the Federal Government (as that term is defined in Sec.  
575.102);
     An appointment as a former employee of the Federal 
Government following a break in service of at least 90 days; and
     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 one or more of the 
categories listed in paragraph (3) of the definition of newly 
appointed. For example, if an individual was employed under a 
competitive or excepted service temporary or time-limited appointment 
during the 90 days immediately preceding an appointment to a GS 
position, the agency may pay the employee a recruitment incentive upon 
appointment to a GS position.

Payment Options and Caps

    The new recruitment incentive authority provides a wide range of 
options for paying a recruitment incentive and significantly raises the 
limit on recruitment incentive payments. Under 5 U.S.C. 5753(d)(2) and 
Sec.  575.109(a) of these interim regulations, an agency may pay a 
recruitment incentive as an initial lump-sum payment at the 
commencement of the service period required by the service agreement in 
equal or variable installment payments throughout the service period 
required by the service agreement, as a final lump-sum payment upon 
completion of the full service period required by the service 
agreement, or in a combination of these payment methods. For example, 
an agency may decide to pay a portion of a recruitment incentive to an 
employee upon appointment to the new position, another portion when the 
employee completes half of the service period required by the service 
agreement, and a final payment when the employee completes the full 
service period required by the service agreement. Under 5 U.S.C. 
5753(d)(4) and Sec.  575.109(d), agencies also may pay all or part of a 
recruitment incentive to an individual who has not yet entered on duty 
once he or she has signed a service agreement under Sec.  575.110.
    Under 5 U.S.C. 5753(d)(1) and Sec.  575.109(b), the total amount of 
recruitment incentive payments received by an employee in a service 
period may not exceed 25 percent of an employee's annual rate of basic 
pay in effect at the beginning of the service

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period (including any special rate or locality payment) multiplied by 
the number of years (or fractions of a year) in a service period. This 
will allow an agency to pay a recruitment incentive of as much as 100 
percent of an employee's annual rate of basic pay in effect at the 
beginning of the service period if the employee signs a 4-year service 
agreement. Special rules apply for determining the annual rate of basic 
pay for employees who do not have a scheduled annual rate (e.g., 
Federal Wage System employees) and for determining the number of years 
in a service period. (See Sec.  575.109(b)(2) and (b)(3).)
    For example, assume an agency decides to pay the maximum 
recruitment incentive to an employee. The recruitment incentive service 
agreement covers 39 pay periods (546 days). The employee's annual rate 
of basic pay (including locality pay) at the beginning of the service 
period is $74,782. To determine the maximum recruitment incentive the 
agency may authorize, the following calculation must be made: $74,782 
(annual rate) x .25 (25%) x 1.5 years (546 days/365 days) = $28,043. 
Thus, the employee may receive recruitment incentive payments totaling 
up to $28,043 for a 39 pay period service agreement. Under Sec.  
575.109(a), the agency may pay the $28,043 recruitment incentive as an 
initial up-front payment at the beginning of the service period, divide 
the $28,043 recruitment incentive into installment payments to be paid 
throughout the service period, pay the full $28,043 at the end of the 
service period, or use a combination of these payment methods.
    As previously discussed in this Supplementary Information, under 5 
U.S.C. 5753(e) and Sec.  575.109(c), an authorized agency official may 
request that OPM waive the 25 percent limitation under Sec.  575.109(b) 
based on a critical agency need. Under such a waiver, the total amount 
of recruitment incentive payments received by an employee in a service 
period may not exceed 50 percent of the employee's annual rate of basic 
pay (including any special rate or locality payment) at the beginning 
of the service period multiplied by the number of years (including 
fractions of a year) in the service period. In no event may a waiver 
provide total recruitment incentives payments exceeding 100 percent of 
the employee's annual rate of basic pay at the beginning of the service 
period. Section 575.109(c)(2) provides the documentation that agencies 
must include when submitting waiver requests to OPM.

Repayment Upon Termination of Service Agreement

    As previously discussed in this Supplementary Information, an 
agency must terminate a recruitment incentive service agreement when an 
employee is demoted or separated for cause, when the employee receives 
a rating of record of less then ``Fully Successful,'' or when an 
employee fails to fulfill the terms of a service agreement (Sec.  
575.111(b)). If an agency terminates a service agreement under these 
circumstances, the employee is entitled to keep all recruitment 
incentive payments that the agency paid to the employee that are 
attributable to completed service. (See Example A in the next 
paragraph.) If the employee received recruitment 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 agrees to such payment under the terms of the recruitment 
incentive service agreement. 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. (See Example B in the next paragraph.)

    Example A: Assume that an employee who signed a 364-day (26-pay 
period) service agreement will receive a total recruitment incentive 
of $28,043 in two installment payments--i.e., $14,021 at the end of 
13 pay periods of completed service and $14,022 at the end of 26 pay 
periods of completed service. The employee receives the first 
payment of $14,021. However, after 20 pay periods (280 days), the 
employee is demoted for cause and the agency terminates the service 
agreement. The employee is entitled to keep the $14,021 recruitment 
incentive payment already received and to receive a prorated share 
of the second planned recruitment incentive payment based on the 
amount of service completed. The employee would receive an 
additional $7,544.07 (280 days/364 days = 76.9%; 76.9% x $28,043 = 
$21,565.07; $21,565.07 - $14,021 = $7,544.07) only if authorized by 
the agency under the terms of the service agreement.
    Example B: Assume an employee signed a 364-day (26-pay period) 
service agreement and received the full amount of a $28,043 
recruitment incentive payment as an initial lump-sum payment. If the 
agency separates the employee for conduct after 20 pay periods (280 
days), the employee would incur an obligation equal to 23.1 percent 
(84 days/364 days) of the payment, or $6,477.93. The employee may 
keep 76.9 percent (280 days/364 days) of the payment, or $21,565.07.

Relocation Incentives

    Under 5 U.S.C. 5753(b)(2)(B)(i) and (ii) and Sec.  575.206 of these 
interim regulations, an agency may pay a relocation incentive to an 
employee of the Federal Government who must relocate to a different 
geographic area without a break in service to accept a position in an 
agency when the position is likely to be difficult to fill or to an 
employee of an agency who must relocate to a different geographic area 
to accept a position when the position is likely to be difficult to 
fill. The relocation may be permanent or temporary and voluntary or 
involuntary. The employee must sign a service agreement to fulfill a 
service period in the new geographic area in return for payment of the 
relocation incentive.
    The new flexibilities and authorities in the relocation incentive 
regulations regarding approval criteria, documentation requirements, 
payment options and caps, service agreement options and requirements, 
and repayment requirements are parallel to the provisions in the 
recruitment incentive regulations at 5 CFR part 575, subpart A, as 
previously described in this Supplementary Information. The following 
provisions are unique to the relocation incentive regulations:
     Under Sec.  575.208(b), an agency may waive the case-by-
case approval requirement for relocation incentives under two specific 
conditions and authorize a relocation incentive for a group or category 
of employees. These conditions are identical to those found in the 
former relocation bonus regulations.
     Under Sec.  575.205(b), an agency may pay a relocation 
incentive if the new position or assignment is in a different 
geographic area. A position is considered to be in a different 
geographic area if the worksite of the new position is 50 miles or more 
from the worksite of the position held immediately before the move. If 
the worksite of the new position is less than 50 miles from the 
worksite of the position held immediately before the move, but the 
employee must relocate (i.e., establish a new residence) to accept the 
position, the head of the agency may waive the 50-mile requirement and 
pay the employee a relocation incentive subject to the requirements in 
subpart B of these interim regulations.
     Under Sec.  575.205(b), an employee must establish a 
residence (temporary or permanent) in the new geographic area before 
the agency may pay a relocation incentive.
     An agency may not pay a relocation incentive to an 
employee before the employee enters on duty in the position to which 
relocated.
    In addition, section 101(b) of Pub. L. 108-411 repealed the $15,000 
relocation

[[Page 25737]]

bonus payment limit that applied to law enforcement officers under 
section 407 of the Federal Employees Pay Comparability Act of 1990 
(Public Law 101-509). All employees are covered by the same relocation 
incentive limit under the new authority at 5 U.S.C. 5753(d) and Sec.  
575.209 of these interim regulations.

Retention Incentives

    Under 5 U.S.C. 5754(b) and Sec.  575.305 of these interim 
regulations, an agency may pay a retention incentive to a current 
employee when the agency determines that the unusually high or unique 
qualifications of the employee or a special need of the agency for the 
employee's services makes it essential to retain the employee and the 
employee would be likely to leave in the absence of a retention 
incentive. Like the former retention allowance authority, Sec.  575.305 
provides agencies with the flexibility to authorize a retention 
incentive for an individual employee or for a group or category of 
employees. (The group retention incentive authority may not be used for 
SL/ST employees, members of the SES or FBI/DEA SES, Executive Schedule 
officials, or employees in similar positions. See Sec.  575.305(c).)

Payment Options and Caps

    Under 5 U.S.C. 5754(e)(1) and Sec.  575.309(a), an agency must 
establish a retention incentive rate for each individual employee or 
group of employees which must be expressed as a percentage of the 
employee's rate of basic pay (including any special rate or locality 
payment). Except as provided in Sec.  575.309(e), the retention 
incentive rate may not exceed 25 percent of an employee's rate of basic 
pay, if authorized for an individual employee, or 10 percent of an 
employee's rate of basic pay, if authorized for a group or category of 
employees.
    The new retention incentive authority provides agencies with a 
number of options for paying a retention incentive. Under 5 U.S.C. 
5754(e)(2)(A) and Sec.  575.309(b), an agency may pay a retention 
incentive in (1) installments after the completion of specified periods 
of service (biweekly, monthly, quarterly, etc.), or (2) a single lump-
sum payment after the completion of the full service period required by 
a service agreement. Under 5 U.S.C. 5754(e)(2), an agency may not pay a 
retention incentive as an initial lump-sum payment at the start of a 
service period or in advance of fulfilling the service period for which 
the incentive is being paid. If an agency chooses to pay retention 
incentives in installments, the agency may compute each retention 
incentive installment payment using the full retention incentive 
percentage rate established for the employee (or group of employees) 
under Sec.  575.309(a) or a reduced percentage rate. An agency may 
decide to use different payment options for different retention 
incentive authorizations.
    Under 5 U.S.C. 5754(e)(2)(B) and Sec.  575.309(c)(1), each 
installment payment is derived by multiplying the retention incentive 
percentage rate by the total rate of basic pay the employee earned 
during the installment period (including any special rate or locality 
payment). If an agency chooses to provide an installment payment that 
reflects a reduced retention incentive percentage rate under Sec.  
575.309(a), any portion of the retention incentive that is accrued by 
the employee during an installment period but not paid must be paid as 
part of a final installment payment to the employee after completion of 
the full service period under the terms of the service agreement. A 
retention incentive paid as a single lump-sum payment upon completion 
of the full service period is derived by multiplying the retention 
incentive percentage rate established for the employee (or group of 
employees) under Sec.  575.309(a) by the total amount of basic pay 
earned by the employee during the full service period. (See 5 U.S.C. 
5754(e)(2)(B) and (C) and Sec.  575.309(c) and (d).)
    The following chart compares how a 10 percent retention incentive 
payment is calculated and paid using a sample of payment options 
available under the regulations. An employee's biweekly rate (computed 
under 5 U.S.C. 5504) must be used to compute an installment payment or 
a lump-sum payment. The installment payment is derived by multiplying 
the percentage incentive retention rate by the employee's basic pay 
earned in each biweekly pay period during the installment period. In 
the examples below, a biweekly rate of $3,057.60 is used to compute 
retention incentive installment payments after 13 and 26 pay periods of 
service and to compute a retention incentive lump-sum payment after 26 
pay periods of service.

----------------------------------------------------------------------------------------------------------------
                                                                                                Total retention
   Retention incentive payment         Retention       Basic pay earned        Retention        incentive paid
             option                 incentive rate      in installment         incentive         after 26 pay
                                                            period            installment           periods
----------------------------------------------------------------------------------------------------------------
Installment payment provided      10% (Each           $39,748.80          $3,974.88 (each)    $7,949.76
 after 13 and 26 pay periods of    installment         ($3,057.60          ($39,748.80 basic   ($3,974.88
 service.                          computed at full    biweekly rate       pay earned times    incentive times 2
                                   percentage rate.).  times 13 pay        10%).               installments).
                                                       periods).
Installment payment provided      10% First           $39,748.80          First: $1,987.44    $7,949.76 (Two
 after 13 and 26 pay periods of    installment         ($3,057.60          ($39,748.80 basic   installments of
 service.                          computed at a       biweekly rate       pay earned times    $1,987.44 and
                                   reduced             times 13 pay        5%).                $5,962.32).
                                   percentage rate     periods).          Second: 5,962.32
                                   of 5%.                                  ($39,748.80 basic
                                  Second installment                       pay earned times;
                                   computed at 10%                         10%, plus
                                   percentage rate,                        $1,987.44
                                   plus remaining 5%                       (remaining 5%
                                   unpaid accrued                          unpaid accrued
                                   incentive from                          incentive from
                                   first installment                       first installment
                                   period.                                 period)).
Final lump-sum payment provided   10%...............  $79,497.60          $7,949.76           $7,949.76 (One
 after 26 pay periods of service.                      ($3,057.60          ($79,497.60 basic   lump-sum payment
                                                       biweekly rate       rate earned times   of $7,949.76).
                                                       times 26 pay        10%).
                                                       periods).
----------------------------------------------------------------------------------------------------------------

    As previously discussed in this Supplementary Information, under 5 
U.S.C. 5754(f) and Sec.  575.309(e), an authorized agency official may 
request that OPM waive the 25 percent payment limitation for individual 
employees or the 10 percent payment limitation for groups of employees 
under Sec.  575.309(a) based on a critical agency need. Under such a 
waiver, a retention incentive may not exceed 50 percent of the 
employee's rate of basic pay (including any special rate or locality 
payment). OPM will consider waiver requests only for those employees or 
groups of employees who will be required to sign a service agreement. 
Section 575.309(e)(2) establishes the documentation that must

[[Page 25738]]

be submitted to OPM for waiver requests. OPM may require that waiver 
requests for groups or categories of employees be coordinated with 
other agencies that have similar categories of employees.
    Under 5 U.S.C. 5754(d)(4) and Sec.  575.309(g), an agency may not 
begin a retention incentive service agreement or begin paying a 
retention incentive during a service period covered by a service 
agreement for payment of a recruitment or relocation incentive. 
However, an agency may authorize a relocation incentive after a 
retention incentive service agreement or retention incentive payments 
have begun.

Aggregate Limitation on Pay

    As previously discussed in this Supplementary Information, 
retention incentives are subject to the aggregate limitation on pay 
under 5 U.S.C. 5307 and 5 CFR part 530, subpart B. Unlike the former 
retention allowance authority, retention incentives under the new 
authority are treated like other covered payments authorized under 
title 5, United States Code, when administering the aggregate 
limitation rules. Excess retention incentive payments that would cause 
an employee's total compensation to exceed the applicable aggregate 
limitation may be deferred and paid in a lump-sum payment at the 
beginning of the following calendar year. This change will simplify 
payroll processing, be easier for employees to understand, and provide 
a full retention incentive to key employees.

Continuation, Reduction, and Termination of Retention Incentive Service 
Agreement

    As previously discussed in this Supplementary Information, an 
agency must terminate a retention incentive service agreement when an 
employee is demoted or separated for cause, if the employee receives a 
rating of record of less than ``Fully Successful'' or equivalent, or 
when the employee fails to fulfill the terms of the service agreement 
(Sec.  575.311(b)). If an agency terminates a retention incentive 
service agreement under these circumstances, the employee is entitled 
to retain any retention incentive payments received that are 
attributable to completed service. 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 agrees to such payment under the 
terms of the service agreement. (See Example C in the next paragraph.)

    Example C: Assume an employee who signed a 364-day (26-pay 
period) service agreement will receive a total retention incentive 
of $7,949.76 in two installment payments--i.e., $3,974.88 at the end 
of 13 pay periods of completed service and $3,974.88 at the end of 
26 pay periods of completed service. The employee receives the first 
payment of $3,974.88. However, after 20 pay periods (280 days), the 
employee is demoted for cause and the agency terminates the service 
agreement. The employee is entitled to keep the $3,974.88 retention 
incentive payment already received. If authorized in the service 
agreement, the employee will receive a prorated share of the second 
planned retention incentive payment based on the amount of service 
completed or an additional $2,138.49 (280 days/364 days = 76.9%; 
76.9% x $7,949.76 = $6,113.37; $6,113.37 -$3,974.88 = $2,138.49).

Termination of Retention Incentive When No Service Agreement Is 
Required

    Under Sec.  575.310(f) of these interim regulations, a written 
service agreement is not required if the agency pays a retention 
incentive in biweekly installments of equal amounts. Section 575.311(g) 
requires agencies to review at least annually each determination to pay 
retention incentives when no service agreement is required to determine 
whether payment is still warranted and to certify this determination in 
writing. An agency may continue such retention incentive payments as 
long as conditions giving rise to the original determination to pay the 
incentive still exist. An agency must reduce or terminate an incentive 
paid without a service agreement whenever payment at the level 
originally approved is no longer warranted. An agency must terminate a 
retention incentive when no service agreement is required if the 
employee is demoted or separated for cause or receives a rating of 
record lower than ``Fully Successful'' or equivalent. If an agency 
terminates a retention incentive when no service agreement is required, 
the agency must provide written notice to the employee, and the 
employee is entitled to receive any scheduled incentive payments 
through the end of the pay period in which the written notice is 
provided.

Recruitment, Relocation, and Retention Authority Monitoring 
Requirements and Revocation or Suspension of Authority

    The interim regulations at Sec. Sec.  575.112, 575.212, and 575.312 
require agencies to monitor their use of the new recruitment, 
relocation, and retention incentive authorities to ensure that their 
recruitment, relocation, and retention plans and the use of the 
authorities are consistent with the requirements and criteria 
established under law and these interim regulations. These sections 
also authorize OPM to revoke or suspend an agency's authority to make 
recruitment, relocation, and retention incentive payments if OPM finds 
the agency's use of the incentive authorities is not consistent with 
law, regulations, and the agency's plans.

Records and Reports

    These interim regulations at Sec. Sec.  575.113(a), 575.213(a), and 
575.313(a) require agencies to keep a record of each determination to 
pay a recruitment, relocation, or retention incentive and to make such 
records available for review upon OPM's request. Section 101(c) of 
Public Law 108-411 also requires OPM to submit an annual report to the 
Committee on Governmental Affairs of the Senate and the Committee on 
Government Reform in the House of Representatives on the operation of 
the new recruitment, relocation, and retention incentive authorities 
for each of the first 5 years in which the new authorities are in 
effect (i.e., 2005 through 2009). Sections 575.113(b), 575.213(b), and 
575.313(b) of these interim regulations require agencies to submit 
specific information and data to OPM for this annual report. OPM will 
issue additional guidance to agencies on these reporting requirements 
by memorandum.

Recruitment, Relocation, or Retention Payments Authorized Before May 1, 
2005

    These interim regulations do not apply to recruitment and 
relocation bonuses and retention allowances authorized under 5 U.S.C. 
5753 and 5754 before May 1, 2005. Under section 101(d)(2) of Public Law 
108-411 and Sec. Sec.  575.114 and 575.214 of these interim 
regulations, a recruitment or relocation bonus service agreement that 
was authorized under 5 U.S.C. 5753 and 5 CFR part 575, subparts A and 
B, before May 1, 2005, remains in effect until its expiration, subject 
to the law and regulations applicable to recruitment and relocation 
bonuses before May 1, 2005. (Note: If an individual or employee 
received a formal offer of a recruitment or relocation bonus before May 
1, 2005, the agency may pay the bonus after that date as long as the 
terms associated with the offer were consistent with the regulations in 
effect when the offer was made.)
    Under section 101(d)(3) of Public Law 108-411 and Sec.  575.314 of 
these interim regulations, retention allowances that were authorized 
under 5 U.S.C. 5754 and 5 CFR part 575, subpart C, before

[[Page 25739]]

May 1, 2005, must continue to be paid until the retention allowance is 
reauthorized or terminated, but not later than April 30, 2006, and are 
subject to the law and regulations applicable to retention allowances 
before May 1, 2005. For example, retention allowances authorized before 
May 1, 2005, must continue to be subject to the special rules regarding 
the aggregate pay limitation under 5 CFR part 530, subpart B, and 5 CFR 
part 575, subpart C, as in effect before May 1, 2005. (Note: If an 
individual or employee received a formal offer of a retention allowance 
before May 1, 2005, the agency may pay the allowance after that date as 
long as the terms associated with the offer were consistent with the 
regulations in effect when the offer was made.)

Other Conforming Changes

Aggregate Limitation on Pay

    These interim regulations amend the definitions of aggregate 
compensation and discretionary payment in 5 CFR 530.202 and 5 CFR 
530.203 of the aggregate limitation on pay regulations to reflect the 
new term retention incentive and the new rules regarding the 
application of retention incentives toward the aggregate pay 
limitation. (See discussion on the aggregate limitation on pay in the 
``Retention Incentives'' section of this Supplementary Information.)
    These interim regulations also make conforming changes to implement 
section 301 of Public Law 108-411. The amended definitions of aggregate 
compensation and basic pay in 5 CFR 530.202 delete obsolete references 
and treat locality payments under 5 CFR part 531, subpart F, as basic 
pay for the purpose of applying the aggregate limitation on pay.

Supervisory Differentials

    These interim regulations amend the regulations regarding 
supervisory differentials at 5 CFR 575.405 to reflect the new term 
retention incentive and to exclude recruitment, relocation, and 
retention incentives from the continuing pay of a supervisor and the 
continuing pay of a subordinate for the purpose of comparing their pay 
and calculating a supervisory differential.
    These interim regulations also make conforming changes to implement 
section 301 of Public Law 108-411 by removing obsolete references and 
treating locality payments under 5 CFR part 531, subpart F, as basic 
pay for the purpose of calculating supervisory differentials.

Extended Assignment Incentives

    These interim regulations amend the extended assignment incentive 
regulations at 5 CFR 575.506 to provide that an agency may not begin 
paying an extended assignment incentive to an otherwise eligible 
employee who is receiving a recruitment, relocation, or retention 
incentive. These interim regulations also make conforming changes to 
implement section 301 of Public Law 108-411 by removing obsolete 
references and treating locality payments under 5 CFR part 531, subpart 
F, as basic pay for the purpose of calculating extended assignment 
incentives.

Waiver of Notice of Proposed Rulemaking and Delayed Effective Date

    Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists 
for waiving the general notice of proposed rulemaking. Also, pursuant 
to 5 U.S.C. 553(d)(3), I find that good cause exists for making this 
rule effective in less than 30 days. These interim regulations 
implement a provision of Public Law 108-411 that became effective on 
May 1, 2005. Waiver of the requirements for proposed rulemaking and 
making the effective date less than 30 days after publication are 
necessary to ensure timely implementation of the law as intended by 
Congress. To delay implementation of these regulations by imposing a 
general notice of proposed rulemaking or an additional 30 day 
implementation requirement would be contrary to the public interest in 
giving Federal agencies flexibility to assist in their recruiting, 
relocation, and retention efforts. The public will be benefited by the 
immediate implementation of these regulations with no detriment, 
financial or otherwise, in taking this action. Comments are being 
solicited which will assist OPM in issuing final regulations without 
negatively affecting agency flexibility.

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.
Dan G. Blair,
Acting Director.

0
Accordingly, OPM amends 5 CFR parts 530 and 575 as follows:

PART 530--PAY RATES AND SYSTEMS (GENERAL)

0
1. Revise the authority citation for part 530 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, Pub. L. 103-89, 107 Stat. 981.

Subpart B--Aggregate Limitation on Pay

0
2. In Sec.  530.202--
0
a. Remove paragraph (2) in the definition of aggregate compensation;
0
b. Redesignate paragraphs (3) through (15) in the definition of 
aggregate compensation as paragraphs (2) through (14), respectively, 
and revise newly redesignated paragraphs (5) and (6); and
0
c. Revise the definitions of basic pay and discretionary payment.
    The revisions read as follows:


Sec.  530.202  Definitions.

* * * * *
    Aggregate compensation means the total of--* * *
    (5) Recruitment and relocation incentives under 5 U.S.C. 5753 and 
retention incentives under 5 U.S.C. 5754;
    (6) Extended assignment incentives under 5 U.S.C. 5757;
* * * * *
    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 B, or any 
locality-based comparability payment under 5 CFR part 531, subpart F, 
or other similar payment or supplement under other legal authority, 
before any deductions. Basic pay includes night and environmental 
differentials for prevailing rate employees under 5 U.S.C. 5343(f) and 
5 CFR 532.511. Basic pay excludes additional pay of any other kind.
* * * * *
    Discretionary payment means a payment an agency has discretion to 
make or not to make to an employee. An extended assignment incentive 
under 5 U.S.C. 5757 is a discretionary payment. However, other payments 
that are preauthorized to be made to an employee at a regular fixed 
rate each pay period are not discretionary payments.
* * * * *

[[Page 25740]]

0
3. In Sec.  530.203, remove paragraph (g)(3) and revise paragraph (d) 
to read as follows:


Sec.  530.203  Administration of aggregate limitation on pay.

* * * * *
    (d) When an agency authorizes a discretionary payment for an 
employee, the agency must defer any portion of such payment that, when 
added to the estimated aggregate compensation the employee is projected 
to receive, would cause the employee's aggregate compensation during 
the calendar year to exceed the applicable aggregate limitation. Any 
portion of a discretionary payment deferred under this paragraph must 
be available for payment as provided in Sec.  530.204. When a 
discretionary payment is authorized but not required to be paid in the 
current calendar year, an agency official's decision to set the payment 
date in the next calendar year is not considered a deferral under this 
paragraph.
* * * * *
0
4. In part 575, revise the title to read as follows:

PART 575--RECRUITMENT, RELOCATION, AND RETENTION INCENTIVES; 
SUPERVISORY DIFFERENTIALS; AND EXTENDED ASSIGNMENT INCENTIVES

0
5. Revise the authority citation for part 575 to read as follows:

    Authority: 5 U.S.C. 1104(a)(2) and 5307; subparts A, B, and C 
also issued under sec. 101, Public Law 108-411, 118 Stat. 2305 (5 
U.S.C. 5753 and 5754); subpart D also issued under 5 U.S.C. 5755; 
subpart E also issued under sec. 207 Public Law 107-273, 116 Stat. 
1779 (5 U.S.C. 5757).


0
6. Revise part 575, subpart A, to read as follows:
Subpart A--Recruitment Incentives
575.101 Purpose.
575.102 Definitions.
575.103 Eligible categories of employees.
575.104 Ineligible categories of employees.
575.105 Applicability to employees.
575.106 Authorizing a recruitment incentive.
575.107 Agency recruitment incentive plan and approval levels.
575.108 Approval criteria and written determination.
575.109 Payment of recruitment incentives.
575.110 Service agreement requirements.
575.111 Termination of a service agreement.
575.112 Internal monitoring requirements and revocation or 
suspension of authority.
575.113 Records and reports.
575.114 Recruitment bonus service agreements in effect before May 1, 
2005.

Subpart A--Recruitment Incentives


Sec.  575.101  Purpose.

    This subpart contains regulations implementing 5 U.S.C. 5753, which 
authorizes payment of recruitment incentives. An agency may pay a 
recruitment incentive to a newly appointed employee under the 
conditions specified in this subpart provided the agency has determined 
that the employee's position is likely to be difficult to fill in the 
absence of an incentive.


Sec.  575.102  Definitions.

    In this subpart:
    Agency means an executive agency or a legislative branch agency 
included in 5 U.S.C. 5102(a)(1).
    Authorized agency official means the head of an agency or an 
official who is authorized to act for the head of the agency in the 
matter concerned.
    Competencies means the knowledge, skills, abilities, behaviors, and 
other characteristics an individual needs to perform the duties of a 
position.
    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). 
An employee also 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.
    Employee of the Federal Government means an employee (as that term 
is defined in 5 U.S.C. 2105, except that the term also includes an 
employee described in 5 U.S.C. 2105(c) and (e)) of any part of the 
Government of the United States (which includes the United States 
Postal Service and the Postal Rate Commission).
    Executive agency has the meaning given that term in 5 U.S.C. 105.
    Newly appointed refers to--
    (1) The first appointment, regardless of tenure, as an employee of 
the Federal Government;
    (2) An appointment as a former employee of the Federal Government 
following a break in service of at least 90 days; 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 one or more of the following:
    (i) A time-limited or non-permanent appointment in the co