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Frequently Asked Questions Pay & Leave

If an employee is receiving a retention incentive and he or she goes into a nonpay status, how is an installment payment computed?

An installment payment is derived by multiplying the rate of basic pay the employee earned in the installment period by a percentage not to exceed the incentive percentage rate established for the employee. (See 5 CFR 575.309(c)(1).) If an employee is in nonpay status during the full installment period, then he or she has earned no basic pay in the installment period, and therefore would receive no retention payment for the period of time he or she is in a nonpay status. If an employee is in a nonpay status for part of the installment or service period, the employee’s retention incentive must be computed based on the amount of basic pay earned.

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