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Frequently Asked Questions Pay & Leave

Recruitment, Relocation and Retention Incentives

  • Yes. See 5 CFR 575.109(f) and 575.209(e) and the definition of aggregate compensation at 5 CFR 530.202.
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  • An agency may pay a retention incentive in installments after the completion of specified periods of service or in a single lump sum after completion of the full period of service required by the service agreement.  (See 5 CFR 575.309(b).)  Installment payments must be consistent with biweekly pay periods, e.g., every 2 pay periods, 6 pay periods, or 8 pay periods.   An agency may not pay a retention incentive to an employee likely to leave for a different Federal position in biweekly installments at the full retention incentive percentage rate established for the employee.  See 5 CFR 531.315(e)(2).
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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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  • 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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  • 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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  • For the purpose of paying a recruitment or relocation incentive, rate of basic pay means the rate of pay fixed by law or administrative action for the position to which an employee is or will be appointed, before deductions and including any special rate supplement under 5 CFR part 530, subpart C, or similar payment under other legal authority, and any locality-based comparability payment under 5 CFR part 531, subpart F, or similar payment under other legal authority, but excluding additional pay of any other kind. For example, a rate of basic pay does not include additional pay such as cost-of-living allowances or post differentials under 5 U.S.C. 5941, night shift differentials under 5 U.S.C. 5343(f) or environmental differentials under 5 U.S.C. 5343(c)(4). (See the definition of rate of basic pay in 5 CFR 575.102 and 575.202.)
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  • Yes. Under 5 CFR 575.205(a)(1), an agency may pay a relocation incentive to an employee who must relocate to a different geographic area either permanently or temporarily, assuming all other conditions are met.
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  • An agency must consider the following factors, as applicable in the case at hand, in making a retention incentive determination for an individual employee or a group or category of employees likely to leave the Federal service:
    • 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 and who, with minimal training, cost, or 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 employee;
    • The success of recent efforts to recruit candidates and retain employees with qualifications similar to those possessed by the employee for positions similar to the position held by the employee;
    • Special or unique competencies needed for the position;
    • Agency efforts to use non-pay authorities to help retain the employee instead of or in addition to a retention incentive, such as special training and work scheduling flexibilities or improved working conditions;
    • The desirability of the duties, work or organizational environment, or geographic location of the position;
    • The extent to which the employee’s departure would affect the agency's ability to carry out an activity, perform a function, or complete a project the agency deems essential to its mission;
    • The salaries typically paid outside the Federal Government; and
    • Other supporting factors.

    (See 5 CFR 575.306(b) and 575.306(c).)

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  • For hourly rate employees who do not have a scheduled annual rate of basic pay, compute the annual rate by multiplying the applicable hourly rate in effect at the beginning of the service period by 2,087 hours. (See 5 CFR 575.109(b)(2) and 575.209(b)(2).)
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  • Agencies may not pay a recruitment or relocation incentive to an employee in a position (1) to which the individual was appointed by the President; (2) in the Senior Executive Service as a non-career appointee; (3) which has been excepted from the competitive service by reason of its confidential, policy-determining, policy-making, or policy-advocating character; (4) designated as the head of an agency, including an agency headed by a collegial body composed of two or more individual members; or (5) in which the employee is expected to receive an appointment as the head of an agency. (See 5 CFR 575.104 and 575.204.)
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