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An official website of the United States Government.

Frequently Asked Questions Pay & Leave

Within-Grade Increases

  • No. Under 5 CFR 575.102, newly appointed is defined as the first appointment as an employee of the Federal Government. All three branches are part of the Federal Government for this purpose.
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  • Under 5 CFR 575.309(e)(2), waiver requests must include—
    • A description of the employee’s work requirements and responsibilities or, if requesting a group retention incentive, a description of the group or category of employees and the number of employees to be covered by the proposed retention incentive;
    • A description of the critical agency need the proposed retention incentive would address;
    • The written documentation required by 5 CFR 575.308;
    • The proposed retention incentive percentage rate and a justification for that percentage;
    • The timing and method of making the retention incentive payments;
    • The service period required; and
    • Any other information pertinent to the case at hand.
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  • Yes. Because a student loan payment owed by the employee is made by the Federal Government on behalf of the employee, the payment is includible in the employee’s gross income and wages for Federal employment tax purposes even though it is made directly to the loan holder.  Consequently, the agency must withhold and pay employment taxes from either the employee’s regular wages, the loan payment, or a separate payment made by the employee.  The applicable employment taxes include Federal income taxes withheld from wages (and, where appropriate, State and local income taxes) and the employee’s share of Social Security and Medicare taxes.  Tax withholdings must be deducted or applied at the time any loan payment is made.  (See 5 CFR 537.106(a)(6).)  The agency may choose among several different methods for withholding taxes.  (See Questions and Answers on Tax Liability.)  Please note the implications of deducting taxes directly from a gross loan payment.  For example, if the agency has approved a student loan repayment benefit of $10,000 and the employee’s tax deductions are $3,000, then the agency will make a loan payment of $7,000.  The full $10,000 counts toward the maximum limitations described in question #4.
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  • No. The gaining agency is not obligated to make any loan payments previously agreed to by another agency.
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  • By March 31 in each of the years 2006 through 2010, each agency must submit a written report to OPM on the use of the retention incentive authority within the agency during the previous calendar year for use in compiling an OPM report to Congress, as required by section 101(c) of Public Law 108-411. Each agency report must include—
    • A description of how the authority to pay retention incentives was used by the agency during the previous calendar year;
    • The number and dollar amount of retention incentives paid during the previous calendar year by occupational series and grade, pay level, or other pay classification; and
    • Other information, records, reports, and data as OPM may require.
    (See 5 CFR 575.313(b).)
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  • Before paying a retention incentive, an agency must establish a plan for using the authority. (See 5 CFR 575.307 and 575.315(c).) The plan must include the designation of officials with authority to review and approve payment of retention incentives, the categories of employees who are prohibited from receiving retention incentives, required documentation for determining that an employee would be likely to leave the Federal service or would be likely to leave for a different position in the Federal service, any requirements for determining the amount of a retention incentive, the payment methods that may be authorized, requirements governing service agreements (including the criteria for determining the length of a service period, the conditions for terminating a service agreement, and the obligations of the agency if it terminates a service agreement), the conditions for terminating retention incentive payments when no service agreement is required, and documentation and recordkeeping requirements.
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  • An agency may unilaterally terminate a recruitment or relocation incentive service agreement based solely 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). In such cases, the employee is entitled to all incentive payments attributable to completed service and to retain any portion of an incentive payment already received that is attributable to uncompleted service. An agency must notify an employee in writing when it terminates a recruitment or relocation incentive service agreement. (See 5 CFR 575.111 and 575.211.)
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  • No.
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  • No.  Student loan payments are not subject to the aggregate limitation under 5 U.S.C. 5307.  The aggregate limitation on pay applies to direct payments made to the employee, whereas student loan payments are paid to the loan holder on behalf of the employee.
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  • Each agency must keep a record of each student loan repayment determination and make such records available for review upon OPM’s request.  Records may be destroyed 3 years after the end of the service period specified in the employee's service agreement if there has been no dispute regarding the agreement. If the service agreement has not been fulfilled, there are other disputes regarding the agreement or the loan payouts, or the agreement has become the subject of litigation, the records should be kept for a minimum of 6 years from the date the facts giving rise to the dispute occurred. If debt collection is pursued against the employee for repayments made by the agency, the agency must keep the records until the debt is fully collected or compromised.
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