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Frequently Asked Questions Pay & Leave

Recruitment, Relocation and Retention Incentives

  • 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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  • 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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  • It is up to the agency to decide how long to set the service period, within certain limitations (e.g., it cannot be shorter than 6 months for a recruitment incentive or longer than 4 years for a recruitment or relocation incentive). Since the reason for the incentive is to attract a candidate to accept a position or to encourage an employee to relocate to a position-and remain at that position-the agency should consider what service period would best help achieve these objectives, i.e., what the agency believes to be a reasonable period of service for the amount of incentive it is willing to pay.
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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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  • An agency must establish a single retention incentive rate for each individual or group of employees, expressed as a percentage of each employee’s rate of basic pay, not to exceed 25 percent (for an individual employee) or 10 percent (for a group or category of employees). (See 5 CFR 575.309(a).) With OPM approval, this cap may be increased to as much as 50 percent under the conditions specified in 5 CFR 575.309(e).
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  • Yes. Agencies may pay relocation incentives to employees receiving a special rate or locality rate.
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  • No, agencies are no longer required to consider using the superior qualifications and special needs pay-setting authority before they authorize a recruitment incentive. However, under 5 CFR 531.212(d) (as in effect on and after May 1, 2005), an agency must consider the possibility of authorizing a recruitment incentive when determining whether to use the superior qualifications and special needs pay-setting authority. The reason for the distinction is that agencies should first consider whether they can attract a candidate by using an authority which has limited implications for the agency budget because it does not increase the employee’s basic pay (e.g., a recruitment incentive) before using a flexibility that increases basic pay (e.g., the superior qualifications and special needs pay-setting authority) which has longer term cost implications.
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  • Before paying a recruitment or relocation incentive, an agency must establish a plan for using the authority.  (See 5 CFR 575.107 and 575.207.)  The plan must include the designation of officials with authority to review and approve the payment of recruitment or relocation incentives, the designation of officials with authority to waive the repayment of a recruitment or relocation incentive, the categories of employees who are prohibited from receiving recruitment or relocation incentives, the required documentation for determining that a position is likely to be difficult to fill, requirements for determining the amount of an incentive, the payment methods that may be authorized, requirements governing service agreements (including criteria for determining the length of a service period, the conditions for terminating a service agreement, and the obligations of the agency and the employee if a service agreement is terminated), and documentation and recordkeeping requirements.   Unless the head of the agency determines otherwise, agency recruitment and relocation incentive plans must apply uniformly across the agency.
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  • Yes.  See 5 CFR 575.309(i) and the definition of aggregate compensation at 5 CFR 530.202.
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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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