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Frequently Asked Questions Pay & Leave

Under what circumstances must an agency terminate an employee’s service agreement, and what are the consequences of terminating the agreement?

An agency must terminate a retention incentive service agreement when conditions change such that the original determination to pay the retention incentive no longer applies (such as when the agency assigns the employee to a different position that is not within the terms of the service agreement) or when payment is no longer warranted.  In such cases, the employee is entitled to retain any retention incentive payments attributable to completed service and to receive any portion of retention incentive payment owed by the agency for completed service.

An agency also 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 of less than "Fully Successful" or equivalent, or otherwise fails to fulfill the terms of the service agreement.  In such cases, the employee is entitled to retain any retention incentive payments attributable to completed service.  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 retention incentive service agreement.

An agency must notify an employee in writing when it terminates a retention incentive service agreement.  (See 5 CFR 575.311.)

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