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Frequently Asked Questions Pay & Leave

Recruitment, Relocation and Retention Incentives

  • No. Retention incentive payments are not subject to the biweekly or annual premium pay limitation, since retention incentives are neither premium pay nor basic pay.
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  • Installment payments must be consistent with biweekly pay periods, e.g., every 2 pay periods, 6 pay periods, or 8 pay periods.
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  • An agency must keep a record of each determination to pay a recruitment or relocation incentive and make such records available for review upon OPM's request. (See 5 CFR 575.113(a) and 575.213(a).)
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  • An agency must narrowly define a targeted category of employees using factors that relate to the group or category‘s unusually high or unique qualifications (i.e., competencies) or the agency‘s special need for the employees‘ services and the high risk that a significant number of the employees will leave the Federal service or for a different Federal position in the absence of a retention incentive.   Factors that may be appropriate include the following:  occupational series, grade level, distinctive job duties, unique competencies required for the position, assignment to a special project, minimum agency service requirements, organization or team designation, geographic location, and required rating of record.  (While a rating of record of higher than "Fully Successful" may be a factor used in defining the targeted category, a rating of record by itself is not sufficient to justify a retention incentive.)  Each retention incentive authorized for a group of employees likely to leave for another Federal position may cover no more than one occupational series.   (See 5 CFR 575.306(c)(2) and 575.315(d)(4).)
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  • For retention incentives that are paid when no service agreement is required, an agency must review each determination to pay the incentive at least annually to determine whether payment is still warranted.  An authorized agency official must certify this determination in writing.  An agency may continue paying a retention incentive to an employee when no service agreement is required as long as the conditions giving rise to the original determination to pay the incentive still exist.  (See 5 CFR 575.311(f).)
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  • Yes. An agency may pay a relocation incentive to an employee who is voluntarily or involuntarily relocated to a different geographic area, assuming all other conditions are met.
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  • The service agreement must specify—
    • The commencement and termination dates of the service period;
    • The retention incentive percentage rate established for the employee;
    • Whether the incentive will be paid in installments or in a lump-sum payment upon completion of the service period and, if paid in installments, whether any installment payments will be paid at less than the full retention incentive percentage rate established for the employee, with the accrued but unpaid incentive payment being paid in a lump sum upon completion of the full service period;
    • The timing of incentive payments;
    • The conditions under which an agreement will be terminated by the agency;
    • The effects of terminating the service agreement, including the conditions under which the agency will pay an additional retention incentive payment for partially completed service; and
    • Any other terms and conditions for receiving and retaining a retention incentive.
    (See 5 CFR 575.310.)
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  • Yes.
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  • The service agreement must specify the commencement and termination dates of the service period, the amount of the incentive, the method and timing of incentive payments, the amount of each incentive payment, the conditions under which an agreement will be terminated by the agency, any agency or employee obligations if a service agreement is terminated (including the conditions under which the employee must repay an incentive or under which the agency must make additional payments for partially completed service), and any other terms and conditions for receiving and retaining a recruitment or relocation incentive. (See 5 CFR 575.110 and 575.210.)
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  • An agency must terminate a service agreement if an employee is demoted or separated for cause (i.e., for unacceptable performance or conduct), receives a rating of record lower than "Fully Successful" or equivalent during the service period, or otherwise fails to fulfill the terms of the service agreement.  In such cases, the employee must repay any portion of the incentive attributable to uncompleted service.  (See 5 CFR 575.111(h) and 575.211(h) for a repayment waiver authority.)  The employee is entitled to retain any incentive payments attributable to completed service.  Exception:  When the employee is separated as a result of material false or inaccurate statements or deception or fraud in examination or appointment, or as a result of failing to meet employment qualifications, the employee must repay all recruitment incentives received under that service agreement.  The agency is not obligated to pay the employee any outstanding incentive payment attributable to completed service unless such payment was required under the terms of the service agreement.  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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