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News Release

Friday, October 22, 2004
Contact: Brenda Bertrand
Tel: 202-606-2402

OPM Trains Chief Human Capital Officers on how to Utilize Newly Enhanced Personnel Flexibilities

Washington, D.C. - A recently passed bill will offer newly updated and modernized personnel flexibilities to allow managers to do the critical work of the Federal Government.  U.S. Office of Personnel Management (OPM) Director of the Office of Congressional Relations John Gartland and OPM Assistant Director for Compensation Administration Don Winstead served as guest speakers at the sixth Chief Human Capital Officers Academy (CHCO) on behalf of OPM Director Kay Coles James.  The meeting was held at the OPM headquarters on October 21, 2004.

The CHCO Academy session focused primarily on the recently enacted human capital legislation S. 129, the Federal Workforce Flexibility Act of 2004, which allowsFederal human resource managers more personnel flexibilities in the area of recruitment, retention and relocation incentives and authorities.  According to the report of the House Committee on Government Reform, the legislation amends current law with regard to critical pay authority, agency training activities, annual leave, recruitment and retention bonuses, and compensatory time off for travel.

OPM Director Kay Coles James said, "The CHCO Council plays a critical role in governmentwide policy development and implementation. The Academy is specifically designed to provide CHCOs with the substantive knowledge necessary to manage for results."

Gartland told the group, "These expanded flexibilities allow the Federal government to do the excellent work of serving the American taxpayer while focusing on our most important asset, our employees," Gartland said. "With the expanded authorities, human resource managers may continue to recruit, hire and retain the best and brightest America has to offer. And, managers will accomplish mission critical goals and continue to build a strong civil service by finding and selecting the best possible candidates."

Some of the major provisions of the Federal Workforce Flexibility Act are as follows:

· Recruitment, Retention and Relocation Bonuses: Federal agencies will have enhanced flexibility, within their budgets, to pay larger recruitment and relocation bonuses based on the length of an agreed-upon service period (capped at 25 percent of annual pay multiplied by years of service, up to a maximum of 4 years of service); Agencies may waive the normal cap on recruitment and relocation bonuses because of a critical agency need in order to pay higher amounts over shorter periods of time (not to exceed a total of 100 percent of the employee's starting salary); Managers may pay retention bonuses to employees who are likely to leave for other Federal positions under conditions prescribed in OPM regulations; and new pay recruitment, relocation, and retention bonuses may be paid out in alternative ways, such as in installments or in a lump sum at the end of a service period.

· Agency Training: Federal agencies will be required to regularly evaluate and modify training programs or plans in order to promote a more strategic approach to agencies' integration of training programs into overall mission accomplishment, and provide specific training to develop managers as part of a comprehensive management succession program.  The flexibility also makes provision to ensure training is provided for managers to effectively handle unacceptable employee performance. 

· Annual Leave: To enhance efforts to recruit senior executives from outside of the Federal government,members of the Senior Executive Service and senior-level employees will now accrue 8 hours of annual leave each pay period. In addition, managers will be able to offer enhanced vacation leave benefits to new recruits from the private sector. In determining their annual leave accrual rate, newly-appointed employees may receive credit for non-Federal work experience. Qualified non-Federal work experience must have been performed in a position with duties that directly relate to the position to which the employee is being appointed and the agency head must determine that offering the higher annual leave accrual rate is necessary to meet the agency mission or performance goal.  

· Pay Administration: Several changes to streamline and rationalize the laws on pay-setting will enable OPM to correct a variety of pay administration anomalies, and will ensure that employees receiving locality pay and special rates are treated similarly when pay is set upon reassignment, promotion, and movements between pay systems and schedules. No employee's pay will be reduced as a result of these corrections.

The discussion of the CHCO Academy also highlighted that the bill shifts primary responsibility for the Federal Government's critical pay authority from the Office of Management and Budget (OMB) to OPM to facilitate increased application of this underutilized flexibility as a means of attracting talented individuals to critical positions in the Federal Government who would not otherwise accept or stay in Government jobs at lower rates of pay.

The sixth CHCO Academy gave Council members a chance to gain first-hand information and training on how to utilize the flexibilities, while providing an open forum to exchange ideas and best practices.

Chief Human Capital Officers from the following agencies attended:

Department of Agriculture

Department of Commerce

Department of Defense

Department of Energy

Department of Justice

Department of Transportation

General Services Administration

Office of Personnel Management

National Science Foundation

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OPM leads and serves the Federal Government in enterprise human resources management by delivering policies and services to achieve a trusted, effective civilian workforce. By Empowering Excellence in Government through Great People, we provide leadership and support to U.S. agencies on issues including human resources policy and oversight, background investigations, federal employee benefits, retirement services, guidance on labor-management relations, and programs to improve workforce performance. For more information, visit or follow OPM on Twitter, Facebook, or LinkedIn.

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