- Section 101 of the Federal Workforce Flexibility Act of 2004
- 5 U.S.C. § 5753-54
- 5 C.F.R. pts. 530 and 575
575-1-20 Coverage and Exclusions
- Coverage: Employees appointed or placed in the following categories or positions are eligibleto receive recruitment, relocation, and retention incentives: General Schedule (GS); senior-level (SL) or scientific or professional (ST) position paid under 5 U.S.C. § 5376; Senior Executive Service (SES) paid under 5 U.S.C. § 5383 as career appointees; law enforcement officers (LEOs); Executive Schedule paid under 5 U.S.C. § 5311-17; prevailing rate positions; certain employees appointed under Title 42 of the U.S. Code; positions for which a waiver for an incentive greater than 25 percent has been approved by OPM; or any other position in a category for which payment of an incentive has been approved by OPM at the request of the head of the employing agency, or for which OPM has extended eligibility, such as the Senior Biomedical Research Service (SBRS).
- Exclusions: The following types of employees are excluded from receiving incentives for recruitment, relocation, and retention.
- Employees in positions to which the individuals are appointed by the President, either by and with the advice and consent of the Senate or without the advice and consent of the Senate.
- Employees in positions in the Senior Executive Service as noncareer appointees (as defined in 5 U.S.C. § 3132(a)(7)).
- Employees in positions excepted from the competitive service by reason of their confidential, policy-determining, policy-making, or policy-advocating nature.
- Members of the Public Health Service Commissioned Corps.
- Agency heads or those expected to receive an appointment as an agency head (i.e., those appointed to other positions in anticipation of subsequent approval to be appointed as the agency head).
- Employees appointed pursuant to Title 42 of the U.S. Code, except 42 U.S.C. § 209(f)-(g) appointees, members of the SBRS, and other employees to the extent permitted by laws, regulations, and governing authorities. (AAOs are encouraged to confer with OHR to verify which Title 42 employees are eligible.)
575-1-30 Definitions
- Recruitment Incentive: An incentive paid to a newly appointed employee if it has been determined that the position is critical to the mission of the organization and is likely to be difficult to fill in the absence of such an incentive.
- Relocation Incentive: An incentive paid to a current federal employee who must relocate to accept a position in a different geographic area (at least 50 miles or more) if it has been determined that the position is critical to the mission of the organization and is likely to be difficult to fill in the absence of such an incentive. Although the payment of relocation incentives is payable only to current federal employees, relocation allowances or “expenses” may be paid to current or newly appointed employees in accordance with General Services Administration, Federal Travel Regulation, Chapter 302, Relocation Allowances.
- Retention Incentive: An incentive paid to a current federal employee if it is determined the unusually high or unique qualifications of the employee or a special need of the organization for the employee’s services in a position critical to the mission of the organization make it essential to retain the employee, and the employee would be likely to leave the federal service in the absence of a retention incentive. An incentive is also allowable to retain an employee or group of employees when a general or specific notice of closure or relocation has been announced and they are essential to retain for mission requirements and are likely to leave for a different position in the federal service in the absence of a retention incentive.
- Newly Appointed Employee
- An individual receiving his or her first appointment, regardless of tenure, as an employee of the federal government.
- An appointment of a former employee of the federal government following a break in federal government service of at least 90 days from a previous appointment.
- To the extent not otherwise excluded an appointment when the employee’s federal service during the 90 day period immediately preceding the appointment was not in a position excluded by 5 C.F.R. § 575.104 and was limited to one or more of the following:
- A time-limited or nonpermanent appointment in the competitive or excepted service.
- Employment with the Washington, D.C. government when the candidate was appointed to that position on or after October 1, 1987.
- Appointment as an expert or consultant under 5 U.S.C. § 3109 and 5 C.F.R. pt. 304.
- A provisional appointment.
- Employment under an Internship Program pursuant to 5 C.F.R. § 213.3402(a).
- Employment as an SES limited appointee or limited emergency appointee (as defined in 5 U.S.C. § 3132(a)(5)-(6)).
- Certain nonappropriated fund employees—e.g., an employee in a nonappropriated fund instrumentality (NAFI) position meeting the definition of a prevailing rate position in 5 U.S.C. § 5342(a)(3) as long as the position is not otherwise excluded by 5 C.F.R. § 575.104, 575.204, and 575.304 and if appointment in the position to which the incentive is being granted occurs after at least a 90-day break in federal service. (AAOs are encouraged to confer with OHR to verify if an NAFI employee is an eligible recipient.)
575-1-40 Responsibilities
The following officials and offices are responsible for administering this policy in accordance with the appropriate statutes and regulations.
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ASA, Office of Human Resources (OHR)
- Updating and maintaining this policy.
- Preparing and submitting periodic reports regarding usage of 3Rs incentives including the annual 3Rs report to OPM.
- Monitoring the use of these incentives to ensure that payments are consistent with the requirements of this policy.
- Publishing specific criteria applicable to documenting position criticality to the organization.
- Reviewing and approving 3Rs waivers greater than 25 and up to 50 percent and submitting the request to OPM for final authorization.
- Providing oversight as it relates to determining whether an employee meets the statutory requirements for receiving a recruitment, relocation, or retention incentive.
- Ensuring that all AAOs have a written delegation of authority addressing the extent and limitations, if any, of powers applicable to the 3Rs incentives program.
- Documenting the criteria used for determining the amount of an incentive payment, method of payment, length of a required service period, or termination of a service agreement.
- Ensuring this policy is applied in a consistent manner when determining the length of service agreements for employees in similar circumstances.
- Submitting all required documentation for authorization and payment of any incentive to their operating human resources center in order to assure regulatory and policy requirements are met prior to authorization of payment.
- Recovering payments from an employee when payments attributable to an incentive create an indebtedness to the OpDiv or StaffDiv.
- For multiyear service agreements, reviewing and certifying annually in writing on the service agreement that the recipient of the incentive continues to meet all requirements therein and continued payment of the incentive is within the division’s budgetary appropriations.
- Notifying incentive recipients in writing whenever the incentive is terminated.
- Establishing and maintaining documentation and records containing the justification and service agreement, if applicable, for each issuance of an incentive payment and making such documentation available for review and analysis upon request by the OHR or OPM.
- Ensuring compliance with regulatory and policy requirements prior to processing the incentive request for payment.
- Providing input to OHR, as required, for periodic or annual reporting requirements in the use of these incentives as required for accountability purposes.
575-1-50 Recruitment Incentives and Services Agreements
- An AAO may approve recruitment incentives paid under this policy for a newly appointed employee to a position that is critical to the mission of the organization and is likely to be difficult to fill without an incentive. Determinations to pay the incentive must be made and approved before the prospective employee enters on duty. Recruitment incentives are not retroactive and cannot be granted or approved after the employee enters on duty.
- Prior to receiving any payment attributable to the recruitment incentive, the employee must sign an agreement to complete a required service period of not less than six months and no more than four years of employment with the OpDiv or StaffDiv, or a successor organization in the event of a transfer of function.
- An AAO may approve recruitment incentives up to 25 percent of an employee’s annual rate of basic pay at the beginning of the service period.
- An AAO will determine the percentage of the recruitment incentive based on one or more of the criteria listed in paragraph H of this section. The approved amount, up to 25 percent, will be multiplied by the number of years (including fractions of a year) in the service period not to exceed four years.
- OPM may waive the 25 percent limitation on recruitment incentives based upon a critical agency need and set the limitation up to 50 percent of an employee’s annual rate of pay at the beginning of a service period multiplied by the number of years (including fractions of a year) in the service period not to exceed two years. In no event should the employee’s total recruitment incentive exceed 100 percent of the employee’s annual rate of pay at the beginning of the service period. An AAO will submit requests for waiver, through the OpDiv or StaffDiv head or designee, to the Deputy Assistant Secretary for Human Resources. Each waiver request must provide the information prescribed in 5 C.F.R. § 575.109(c)(2).
- For group recruitment incentives only.
- An AAO may target groups of similar positions identified as difficult to fill, establish criteria in advance for offering recruitment incentives to all newly appointed employees in the target groups, and authorize an official who is not lower than a candidate’s supervisor to discuss a potential recruitment incentive (in any amount within a preestablished range) to a candidate. Group incentives may not be paid to employees in SL, ST, or SBRS positions, employees appointed as SES noncareer employees, employees in Executive Schedule positions, or employees in similar categories for which payment of recruitment incentives has been approved by OPM.
- The targeted group of employees must be defined using factors that relate to the conditions described in paragraph H of this section. Factors that may be appropriate include: occupational series, grade level, distinctive job duties, unique competencies required for the position, and geographic location.
- AAOs must review the decision to target a group of similar positions for the purpose of granting a recruitment incentive and certify, in writing, that the targeted positions are still likely to be difficult to fill. If the AAO determines the positions are no longer likely to be difficult to fill, the OpDiv or StaffDiv must terminate the recruitment incentive to the newly appointed employees in that group on a group basis.
- 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 position using indicators such as offer-acceptance rates, proportion of positions filled, and the length of time required to fill similar positions.
- Salaries typically paid outside the federal government for similar positions.
- Recent turnover in similar positions.
- Employment trends and labor market factors that may affect the organization’s ability to recruit candidates for similar positions.
- Special or unique competencies required for the position.
- Organization efforts to use nonpay authorities, such as special training and work scheduling flexibilities, to resolve difficulties alone or in combination with a recruitment incentive.
- Desirability of the duties, work or organizational environment, or geographic location of the position.
- Other supporting factors.
- In a lump sum at the beginning of the service period stated in the agreement.
- In equal or variable installment payments throughout the service period.
- As a final lump-sum payment at the end of the specified service period.
- The period of service (in months and years) agreed to by the employee and the total amount authorized for payment.
- The actual beginning and ending dates of the service period. The service period must commence on the first day of an employee’s service with the organization and end on the last day of a pay period—except when the employee:
- Begins work other than the first day of the pay period, the service period will begin on the first day of the next pay period. If the first day of a pay period is a holiday, the effective date of the employee’s appointment and other paperwork is the Tuesday immediately following the holiday.
- Is required to complete a probationary period or an initial period of formal training, the employee’s service period may be delayed until the beginning of the pay period following the completion of the probationary or training period. Because the AAO must approve the recruitment incentive before the employee enters on duty, the service agreement also must specify that there is no obligation to pay any portion of the incentive if the employee does not successfully complete the probationary period or training.
- Agreements must terminate when an employee is demoted or separated for cause, receives a less than “Fully Successful” or equivalent rating of record, or otherwise fails to fulfill the terms of the service agreement.
- Agreements may be unilaterally terminated based solely upon management needs such as reduction-in-force or insufficient funds.
- An employee who fails to fulfill the service agreement is entitled only to payments that have already been received up to the amount attributable to completed service, unless the agreement states otherwise. If the AAO unilaterally terminates the service agreement based solely upon management needs prior to the service period completion date, the employee is entitled to all incentive payments already received and any additional payments, if necessary, to provide payment in the amount attributable to completed service.
- Employees must reimburse the Department the sum of all benefits received under a service agreement that is in excess of the amount attributable to completed service. In the event an employee fails to reimburse the Department for amounts owed, the outstanding amount shall be recovered from the employee under regulations for collection by offset from an indebted government employee under 5 U.S.C. § 5514, 5 C.F.R. pt. 550, subpart K, and 45 C.F.R. § 33.1 et seq.
- An employee must repay all payments attributable to a recruitment incentive when the service agreement is terminated due to an employee’s separation resulting from materially false or inaccurate statements, deception, or fraud in examination or appointment; or as a result of failing to meet employment qualifications.
- In accordance with 5 U.S.C. § 5373(g) and 5 C.F.R. § 575.111(h), an AAO may waive recovery of the amount in excess of that attributable to completed service, if in the AAO’s judgment, collection would be against equity and good conscience and not in the best interest of the United States. Under no circumstances can a waiver be granted when an employee is separated because of materially false or inaccurate statements, deception, or fraud in examination or appointment as prescribed in paragraph 5 of this subsection. Payments for which collection is waived are deemed to be a valid.
- The AAO must notify an employee in writing when the service agreement is terminated.
- Employees cannot grieve or appeal any decision to terminate the service agreement.
- Relocation incentive authorized in accordance with this Instruction and 5 C.F.R. pt. 575, subpart B.
- Retention incentive for which an employee receives payments with or without a service agreement authorized under this Instruction and 5 C.F.R. pt. 575, subpart C.
575-1-60 Relocation Incentive and Service Agreements
- An AAO may approve relocation incentives paid under this policy to a current federal employee who, without a break in service, must relocate to accept a position in a different geographic area, as defined in 5 C.F.R. § 575.205(b), that is mission critical and likely to be difficult to fill without such an incentive. Relocation incentives are not retroactive and cannot be granted or approved after the employee enters on duty in the position in the new geographic area for which the incentive is being authorized.
- The relocation incentive is payable only if the employee provides proof of residency in the new geographic area and maintains residency in the new geographic area for the entire service period as established by the agreement.
- An AAO may approve relocation incentives whether the relocation is permanent or temporary.
- Prior to receiving any payment attributable to the relocation incentive, the employee must sign an agreement to complete a service period of not less than six months and no more than four years of employment with the OpDiv or StaffDiv, or successor organization in the event of a transfer of function, at the new duty station.
- An AAO may approve relocation incentives up to 25 percent of an employee’s annual rate of basic pay at the beginning of the service.
- The AAO will determine the percentage of the relocation incentive based on one or more of the criteria listed in paragraph K of this section. The approved percentage will be multiplied by the number of years (including fractions of a year) in the service period not to exceed four years.
- In accordance with 5 C.F.R. § 575.209(c)(1), OPM may waive the 25 percent limitation on relocation incentives based on a critical agency need and set the limitation up to 50 percent of an employee’s annual rate of pay at the beginning of a service period multiplied by the number of years (including fractions of a year) in the service period not to exceed two years. In no event should the employee’s total relocation incentive exceed 100 percent of the employee’s annual rate of pay at the beginning of the service period. AAOs will submit requests for waiver, through the OpDiv or StaffDiv head, to the Deputy Assistant Secretary for Human Resources. Each waiver request will provide the information prescribed in 5 C.F.R. § 575.209(c)(2).
- To be eligible for a relocation incentive, the employee must have a rating of record of at least “Fully Successful” or equivalent for the position held immediately before the move.
- For group relocation incentives only.
- An AAO may waive the requirement to make case-by-case determinations and approve group relocation incentives under the following conditions:
- The employee is a member of a group of employees subject to a mobility agreement and relocation incentives are necessary to retain the group of employees to ensure continuation of operations.
- A major organizational unit is relocated to a new duty station and the relocation incentives will ensure continued operations of that unit without undue disruption to operations or functions deemed essential to the division’s mission.
- 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.
- Salaries typically paid outside the federal government for similar positions.
- Recent turnover in similar positions.
- Employment trends and labor market factors that may affect the organization’s ability to recruit candidates for similar positions.
- Special or unique competencies required for the position.
- Organization efforts to use nonpay authorities, such as special training and work scheduling flexibilities, to resolve difficulties alone or in combination with a recruitment incentive.
- Desirability of the duties, work or organizational environment, or geographic location of the position.
- Other supporting factors.
- The basis for determining that a position is likely to be difficult to fill based upon the factors enumerated in paragraph K of this section.
- The basis for authorizing the incentive for an employee.
- The basis for the total amount of the incentive.
- The basis for the timing of the approved incentive payments.
- The basis for the length of the required service period.
- Affirmation that the employee’s new position is in a different geographic area—i.e., the worksite of the new position is located 50 miles or more from the worksite of the position held immediately before the move or affirmation that the 50-mile requirement was waived and justification for the waiver.
- Affirmation that the employee established a residence in the new geographic area.
- In a lump sum at the beginning of the service period stated in the agreement.
- In equal or variable installment payments throughout the service period.
- As a final lump-sum payment at the end of the specified service period.
- Definition of the boundaries of the new geographic area to which the employee must relocation.
- Statement that the employee is required to maintain residency in the new geographic area for the duration of the service period established in the agreement.
- The period of service (in months and years) agreed to by the employee and the total amount authorized for payment.
- The actual beginning and ending dates of the service period. The service period must begin on the first day of an employee’s service date at the new duty station and end on the last day of a pay period—except if the employee:
- Begins work other than on the first day of the pay period, the service period will commence on the first day of the next pay period. If the first day of a pay period is a holiday, the effective date of the employee’s appointment and other paperwork is the Tuesday immediately following the holiday.
- Is required to complete an initial period of formal training or probationary period, the employee’s service period may be delayed until the beginning of the pay period following the completion of the training or probationary period. Because the AAO must approve the relocation incentive before the employee enters on duty at the new duty station, the service agreement also must specify that there is no obligation to pay any portion of the incentive if the employee does not successfully complete the probationary period or training.
- Agreements must terminate when an employee is demoted or separated for cause, receives a less than “Fully Successful” or equivalent rating of record, otherwise fails to fulfill the terms of the service agreement, or fails to maintain residency in the new geographic area at any point during the service period established by the agreement. Under these circumstances, the employee is entitled to retain relocation incentive payments previously paid by the OpDiv or StaffDiv that are attributable to the completed service period.
- Agreements may be unilaterally terminated based solely upon management needs such as reduction-in-force or insufficient funds. Under these circumstances, an employee is entitled to all relocation incentive payments attributable to completed service and to retain any portion of the incentive payment he or she has already received that is attributable to uncompleted service.
- In accordance with 5 C.F.R. § 575.211(f), the OpDiv or StaffDiv is not obligated to pay any amount not yet received by the employee that is attributable to completed service, unless the division agreed to do so in the service agreement. But if the employee received relocation incentive payments in excess of the amount that is attributable to the completed portion of the service period, he or she must repay the excess amount.
- To determine the amount attributable to completed service versus the amount that cannot be attributed to completed service, the total amount of the authorized relocation incentive must be prorated across the length of the service period. 5 C.F.R. § 575.211(i).
- In the event that an employee fails to reimburse the Department for amounts owed, the outstanding amount will be recovered from the employee under regulations for collection by offset from an indebted government employee under 5 U.S.C. § 5514, 5 C.F.R. pt. 550, subpart K, and 45 C.F.R. § 33.1 et seq.
- In accordance with 5 U.S.C. § 5373(g) and 5 C.F.R. § 575.211(h), an AAO may waive recovery of the amount in excess of the amount attributable to completed service if in the AAO’s judgment, collection would be against equity and good conscience and not in the best interests of the United States. Payments for which collection is waived are deemed to be a valid payment.
- The AAO must notify the employee in writing when a service agreement is terminated.
- Employees cannot grieve or appeal any decision to terminate the service agreement.
- Recruitment incentive authorized under this Instruction and 5 C.F.R. pt. 575, subpart A.
- Relocation incentive previously authorized under this Instruction and 5 C.F.R. pt. 575, subpart B.
575-1-70 Retention Incentive and Service Agreements
- An AAO may approve a retention incentive paid under this Instruction to an individual employee who has unusually high or unique qualifications or when the organization has a special need for the employee’s services that makes it essential to retain the employee and the employee would be likely to leave federal service in the absence of an incentive. An AAO may approve a retention incentive to a group of employees with unusually high or unique qualifications or when a special need for the employees’ service makes it essential to retain the employees in that group and there is a high risk that a significant number of the employees in the group would be likely to leave the federal service in the absence of a retention incentive. Group retention incentives cannot be paid to employees in SL, ST, or Executive Schedule positions, or SBRS employees in similar categories for which payment of retention incentives has been approved by OPM.
- It is not intended that OpDivs and StaffDivs will use retention incentives as a long-term staffing flexibility. Instead, the organization should have in place an effective succession plan for leadership and nonleadership positions, detailing its strategy to eventually eliminate or reduce the need for the use of a retention incentive. Succession plans:
- Must discuss the quality and availability of potential sources of employees who possess the competencies required for the position and who, with minimal training, cost, and disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the incumbent.
- May include future recruitment and training efforts, any changes in the distribution of workflow, the effectiveness of processes or measures that have been considered to retain the employee’s services without paying the incentives.
- Objective need for retaining the services of the particular employee or group of employees.
- Quality and availability of potential sources of employees who possess the competencies required for the position and who, with minimal training, cost, and disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the incumbent.
- Employment trends and labor market factors such as the availability and quality of candidates in the labor market possessing the competencies required for the position.
- Success of recent efforts to recruit candidates and retain employees with competencies similar to those possessed by the employee for positions similar to the position held by the employee.
- Special or unique competencies required for the position.
- Efforts to use nonpay authorities to help retain the employee in lieu of or in addition to a retention incentive, such as special training and work scheduling flexibilities or improving working conditions.
- Desirability of the duties, work or organizational environment, or geographic location of the position.
- Extent to which the employee’s departure would impair the organization’s ability to carry out an activity, perform a function, or complete a project that the OpDiv or StaffDiv deems essential to its mission.
- Salaries typically paid outside of the federal government.
- Other supporting factors, including the strategies outlined in the organization’s succession plan for addressing the recruitment needs of the position.
- The AAO must consider the factors enumerated in paragraph K of this section as they relate to a group of employees—
- With unusually high or unique qualifications or that the division has a special need for the employees’ services that make it essential to retain the employees in the group.
- That it is reasonable to presume that there is a high risk that a significant number of employees in the targeted group would be likely to leave federal service in the absence of a retention incentive.
- The basis for determining that the unusually high or unique qualifications of the employee (or group of employees) or a special need of the agency for the employee’s (or group of employees) services makes it essential to retain the employee(s).
- The basis for determining that the individual employee or a significant number of a targeted group of employees would be likely to leave the federal service in the absence of a retention incentive.
- The basis for establishing the amount of the retention incentive.
- The basis for establishing the timing of the approved retention incentive payment.
- The basis for establishing the length of the service period.
- AAOs may not approve the payment of a retention incentive as an initial lump-sum payment at the start of a service period or as an installment paid in advance.
- Single lump-sum payments paid upon completion of the service period are derived by multiplying the retention incentive percentage rate established for the employee (or group of employees) by the total basic pay earned by the employee during the full service period.
- An installment payment is derived by multiplying the rate of basic pay the employee earns in the installment period by the percentage established for the employee by the AAO.
- Installments may be paid after the completion of specified periods of service using variable percentages for each installment. If this method is used, the organization must pay the accrued but unpaid portion of the retention incentive as part of the final payment upon completion of the service agreement.
- Service agreements are not required for retention incentives paid in biweekly installments unless the incentive is granted under the provisions of paragraph H of this section or the employee received a reduced percentage for each installment made prior to the final payment.
- The period of service (in months and years) and total amount of the incentive agreed to by the employee.
- The actual beginning and ending dates of the service period. The service period must begin on the first day of a pay period and terminate on the last day of a pay period.
- The retention incentive percentage rate, the method of payment, and if paid in installments, the method of installment payments (i.e., equal percentage rates or reduced percentage rates per installment with a final lump-sum payment of the accrued but unpaid amount of the incentive).
- The conditions under which the AAO must terminate the service agreement (i.e., if an employee is demoted or separated for cause, receives a rating of record of less than “Fully Successful” or equivalent, otherwise fails to fulfill the terms of the service agreement, or when conditions change such that the original determination to pay the retention incentive no longer applies).
- The terms or conditions that may result in termination of the service agreement (e.g., insufficient funds, reassignment to a different type of position, or any additional terms that if violated by the employee will result in termination of the agreement).
- The consequence of both voluntary and management decisions to terminate service agreements (e.g., conditions under which the employee must repay any unearned portion of the incentive he or she may already have received).
- Employees cannot grieve or appeal any decision to terminate payments for a retention incentive whether or not a service agreement is required.
- Retention incentives must terminate when an employee is demoted or separated for cause, receives a less than “Fully Successful” or equivalent rating of record, otherwise fails to fulfill the terms of the service agreement, or when conditions under which the original incentive was approved no longer applies. Under these circumstances, the employee is entitled to retain retention incentive payments previously paid by the OpDiv or StaffDiv that are attributable to the completed portion of the service period. And if the employee received retention incentive payments that are less than the amount attributable to the completed portion of the service period, the division is not obligated to pay the employee the amount attributable to completed service, unless the written service agreement states otherwise.
- Retention incentive must be terminated when the employee moves to a different position.
- Retention incentives must be reduced or terminated when payment at the level originally approved is no longer warranted. Factors to consider include:
- Amount, if any, necessary to retain the employee (or group of employees).
- Availability of qualified candidates.
- Budget conditions.
- Other supporting factors.
- Review and certify in writing, at least annually, the decision to pay and confirm that circumstances still warrant continued payment.
- Reduce or terminate the incentive when the conditions change such that the original determination to pay no longer applies or when payment is no longer warranted at the level originally approved or at all after considering whether:
- A lesser amount or none at all would be sufficient to retain the individual or group of employees.
- Labor market factors make it more likely (or reasonably likely) to recruit candidates with competencies similar to those possessed by the individual or group of employees.
- The division’s need for the services of the individual or group of employees has been reduced to a level that makes it unnecessary to continue payment at the level originally approved or at all.
- Recruitment and relocation incentive approved pursuant to this Instruction and 5 C.F.R. pt. 575, subparts A and B. (Note: The distinction that is created in this subsection and paragraph R of § 575-1-60 is one of order of approval. When warranted, it is permissible to approve a relocation incentive during the service period (i.e., after the approval) of a retention incentive. It is impermissible, however, to approve a retention incentive during the service period (i.e., after the approval) of a relocation incentive.
- Retention incentive for an individual or group of employees approved pursuant to this Instruction and 5 C.F.R. pt. 575, subpart C.
575-1-80 Documentation, Reporting, and Monitoring
- Documenting. Each OpDiv or StaffDiv approving a determination to pay an incentive shall document its decision in sufficient detail to justify the payment and permit reconstruction of the action. The paperwork will be submitted to the Human Resources Center to review for sufficiency, adherence to this Instruction, and document retention. This documentation must include a copy of the service agreement, the initial incentive determination, where necessary the employee’s rating for the previous performance period, and the following information:
- The criteria used to determine the need for paying the incentive (including the need for advance determination) and how the criteria were applied.
- The criteria used to determine the amount of the incentive and how the criteria were applied.
- The qualifications of the employee in sufficient detail to demonstrate that he or she meets any special qualifications needed for the position.
- The length of the service agreement and the criteria used to make that determination.
- Upon approval, the Human Resources Center shall prepare an SF-50 to document payment of the incentive and file that document in the employee’s electronic Official Personnel Folder (eOPF).
- The type of incentive.
- Title, pay plan, series, and grade of the recipient.
- Total number of employees paid a particular incentive by title, pay plan, series, and grade.
- Total dollar amount paid for a particular incentive by title, pay plan, series, and grade.
- A narrative discussion of the situations for which incentives were used, the effectiveness of the retention incentive authorities, and any recommendations for improving the use of the statutory authorities in terms of both regulatory change and Department requirements and flexibilities.
Exhibit A: Summary of Approval Authority for 3Rs Incentives
- OpDiv or StaffDiv head
- IG
- AAO
Approve requests for retention incentives when the proposed incentive does not exceed 25% for an individual or 10% for a member of a group.
- OpDiv or StaffDiv head
- IG
- AAO
- OpDiv or StaffDiv head
- IG
- AAO
- ASA
Exhibit B: 3Rs Incentives Comparison Chart
- Difficulty in recruiting candidates;
- Success of recent efforts to recruit candidates for similar positions;
- Nonfederal salaries for similar positions;
- Recent turnover;
- Labor market factors;
- Special skills, qualifications, etc.;
- Available hiring flexibilities;
- Work environment or geographic location, etc.
- Lump sum at beginning of service period;
- Final lump sum payment upon completion of service period;
- Installments; or
- Any combination of these.
- See Recruitment; and
- Incentive paid only after the employee establishes residence in the new commuting area, although the incentive must be approved prior to the employee’s entry on duty for the position in the new commuting area.
- Unusually high or unique qualifications;
- Special need of organization; and
- Employee would leave federal service.
- Installment after completion of specific periods of service;
- Single lump sum after completion of full period of service per the service agreement; or
- Biweekly.
HHS Recruitment, Relocation, and Retention Incentives Service Agreement
U.S. DEPARTMENT OF HEALTH & HUMAN SERVICES
RECRUITMENT, RELOCATION, AND RETENTION INCENTIVES
SERVICE AGREEMENT
EMPLOYEE Information
Name (Last, First, MI)
Pay Plan, Occupation Series, Grade/Step
___ Full-time ___ Part-time (number of normal hours per pay period )
Rate of Basic Pay (before incentive)
Base pay $ __________ Locality $ __________ Other $ __________
SERVICE AGREEMENT CONDITIONS
Type of Incentive
___ Recruitment ___ Relocation ___ Retention
For relocation incentives, the new geographic area is defined as a worksite that is 50 miles or more from the worksite of the position held immediately before relocating.
___ Individual incentive
___ Group incentive
Total Amount of Incentive
Percentage of Rate of Basic Pay
Is OPM approval required for the incentive (i.e., proposed incentive is greater than 25%)?
Is the employee required to complete a probationary or training period before payment of the incentive begins?
___ Yes Date probationary or training period ends __________
The organization is not obligated to pay an incentive when the employee fails to successfully complete the probationary or training period before the service period commences.
Required Service Period
_____ years _____ months
Minimum of 6months and maximum of 4 years for recruitment and relocation incentives
Method of Payment
___ Installment by pay period
___ Installment by service period (describe below)
___ Combination of above (describe below)
Extent to which time on detail, in a nonpay or paid leave status is creditable toward the service period
Basis for Termination of Service Agreement
_X_ Employee demoted or separated for cause
_X_ Employee’s rating of record less than Fully Successful or equivalent
_X_ Employee failed to fulfill the service agreement (other than above)
_X_ For relocation incentives only: Employee failed to maintain residency in the new geographic area for the duration of the service agreement
_X_ For retention incentives only: Conditions change such that the original determination to pay the incentive is no longer justified
___ Management needs of the organization
___ Other (describe below)
NOTICE A DECISION TO TERMINATE A RECRUITMENT, RELOCATION, OR RETENTION SERVICE AGREEMENT
CANNOT BE GRIEVED OR APPEALED BY THE EMPLOYEE.
Describe the conditions under which the employee must repay the incentive.
Describe the conditions, if any, under which the organization will remit an additional incentive payment, if necessary, for partially completed service if the service agreement is terminated.
AUTHORIZATION
I have read the information contained in this service agreement and understand that the agreement is valid only when signed by the Authorized Agency Official and me. I acknowledge that under certain circumstances I may be required to reimburse amounts attributable to the incentive. I further understand that if the incentive is terminated for any reason, I am not entitled to grieve or appeal that decision.
I certify that this _______________________________ incentive meets the criteria for approval as provided in HHS Instruction 575-1: Recruitment, Relocation, and Retention Incentives.
Authorized Agency Official Signature
JUSTIFICATION FOR CONTINUATION, REDUCTION, OR TERMINATION OF RETENTION INCENTIVES
The basis for paying all retention incentives must be certified at least annually, in writing, by the Authorized Agency Official, whether or not there is a written service agreement.
A retention incentive must be terminated if the employee is demoted or separated for cause, receives a rating of less than Fully Satisfactory or equivalent, or otherwise fails to fulfill the service agreement. The organization must reduce or terminate the amount/percentage of a retention incentive when conditions change such that the original determination to pay the incentive no longer applies, or when payment is no longer warranted given a change in labor market factors, an incentive is no longer required to retain the employee(s), or the need for the employee’s service no longer justifies the incentive.
EMPLOYEE INFORMATION
Name (Last, First, MI)
Pay Plan, Occupation Series, Grade/Step
___ Full-time ___ Part-time (number of normal hours per pay period ______ )
REVIEW OF INCENTIVE
Basis for Review
___ Annual certification ___ Other ____________
___ Individual incentive ___ Group incentive
Effective date of initial incentive _______________
Total amount of initial incentive $ _______________ Percentage of initial incentive ______ %
Effective date of continuation/termination _______________
Total amount of continued incentive $ _______________ Percentage of continued incentive ______ %
SUCCESSION PLANNING
(for leadership and nonleadership positions)
Describe the organization’s succession plan for the position for which the incentive is being granted.
Describe the quality and availability of potential sources of employees identified by the organization’s succession plan who currently possess the unique competencies required by the position or who with minimal training, cost, and disruption of service to the public could perform the full range of duties and responsibilities at the level performed by the employee.
Describe other efforts in the organization plan to eventually eliminate or reduce the use of retention incentives for the position.
JUSTIFICATION FOR CONTINUING INCENTIVE
Describe, as applicable, how the following factors contribute to the determination that the retention incentive is necessary (for individual and group incentives).
Employment trends and labor market factors
Recent recruitment efforts
Special or unique competencies required for the position
Efforts to use nonpay authorities in lieu of or in addition to retention incentives
Desirability of duties, work or organizational environment, or geographic location of the position
Extent to which employee’s departure would impair the organization’s ability to carry out an activity, perform a function, or complete a project that the organization deems essential to its mission
Salaries typically paid outside the federal government
Other supporting factors
Basis for determination that employee is likely to leave federal service if incentive is not granted
CERTIFICATION
I certify that the above information is accurate and meets the criteria for continuation, reduction, or termination of the retention incentive as required by HHS Instruction 575-1: Recruitment, Relocation, and Retention Incentives.
_____________________________________________
Authorized Agency Official Signature
____________________
- An AAO may waive the requirement to make case-by-case determinations and approve group relocation incentives under the following conditions: