Fact Sheet: Paid Time Off Upon Transfer or Separation

The following information provides an overview of the status of various types of paid time off balances upon an employee’s transfer to another agency or separation from Federal service. References to transfer refer to an employee’s transfer without a break in service between positions covered by OPM’s paid time off authorities. When an employee transfers to a position not covered by OPM’s paid time off authorities, the rules of the system to which the employee transfers govern whether the paid time off will be accepted for transfer. References to separation include any means by which the employee’s Federal service is terminated, including by retirement or death.

Note: Please see OPM’s Leave Upon Transfer or Separation fact sheet for an overview of what happens to an employee’s leave upon transfer or separation.

Paid Time Off Category	Paid Time Off Upon Transfer	Paid Time Off Upon Separation
Compensatory Time Off in lieu of Overtime (FLSA-Exempt Employees)	Unused compensatory time off will be paid out to the employee upon transfer or forfeited, depending on the losing agency’s policy (5 CFR 550.114(f)). Any payment provided is at the overtime rate in effect when the hours were earned (5 CFR 550.114(g)).	Unused compensatory time off will be paid to the employee upon separation or forfeited, depending on the losing agency’s policy (5 CFR 550.114(f)). Unused compensatory time off hours must be paid out if the employee separates due to uniformed service or compensable workplace injury (5 CFR 550.114(f)(2)). Any payment provided is at the overtime rate in effect when the hours were earned (5 CFR 550.114(g)).
Compensatory Time Off in lieu of Overtime (FLSA-Nonexempt Employees)	Unused compensatory time off hours must be paid out upon transfer at the overtime rate in effect when the hours were earned (5 CFR 551.531(d) and (g)).	Unused compensatory time off hours must be paid out upon separation at the overtime rate in effect when the hours were earned. (5 CFR 551.531(d) and (g))
Compensatory Time Off for Travel	Compensatory time off for travel is forfeited upon transfer (5 CFR 550.1407(b)).	Compensatory time off for travel is typically forfeited upon separation. If, however, the employee separates to perform uniformed service, or due to compensable workplace injury and later returns to the same (or successor) agency, the compensatory time off for travel is reinstated. In those situations, a returning employee has until the end of the 26th pay period following the pay period in which the employee returns to duty in which to use the time off (5 CFR 550.1407(a)(2) and (c)).
Compensatory Time Off for Religious Observances	Religious compensatory time off hours earned but not yet used must be paid out upon transfer at the hourly rate of basic pay in effect at the time they were earned. Religious compensatory time off hours used but not earned create an indebtedness of the employee to the losing agency. The losing agency must take corrective action to recoup the indebtedness for any advanced hours of religious compensatory time off. The losing agency may reduce or eliminate the debt owed by a charge to the employee’s annual leave, earned credit hours, compensatory time off in lieu of regular overtime pay, compensatory time off for travel, or time-off awards, based on agency policy. Any remaining negative balance must be charged to LWOP and the resulting indebtedness is subject to the agency’s debt collection procedures (5 CFR 550.1008).	Religious compensatory time off hours earned but not yet used must be paid out upon separation at the hourly rate of basic pay in effect at the time they were earned. Religious compensatory time off hours used but not earned create an indebtedness of the employee to the losing agency. The losing agency must take corrective action to recoup the indebtedness for any advanced hours of religious compensatory time off. The losing agency may reduce or eliminate the debt owed by a charge to the employee’s annual leave, earned credit hours, compensatory time off in lieu of regular overtime pay, compensatory time off for travel, or time-off awards, based on agency policy. Any remaining negative balance must be charged to LWOP and the resulting indebtedness is subject to the agency’s debt collection procedures (5 CFR 550.1008).
Credit Hours earned under a Flexible Work Schedule	Credit hours must be paid out at the rate of basic pay in effect at the time of transfer (5 U.S.C. 6126(b)). The maximum allowable credit hours that may be payable is 24 hours (for full time employees) (5 U.S.C. 6126(b)).	Credit hours must be paid out at the rate of basic pay in effect at the time of separation (5 U.S.C. 6126(b)). The maximum allowable credit hours that may be payable is 24 hours (for full time employees) (5 U.S.C. 6126(b)).
Time-Off Awards	Unused time-off awards are not transferable, unless a special arrangement is made with the gaining agency to honor the time-off award granted by the losing agency. Time-off awards may not be converted into cash payments (5 U.S.C. 4502(e) and 5 CFR 451.104(f)).	Unused time-off awards are forfeited upon separation. Time-off awards may not be converted into cash payments (5 U.S.C. 4502(e) and 5 CFR 451.104(f)).

Questions

Agencies are responsible for the administration of various types of paid time off for their employees and for establishing their own HR policies based on OPM’s paid time off authorities in chapters 45, 55, and 61 of title 5, United States Code, and the regulations in parts 451, 550, 551, and 610 of title 5, Code of Federal Regulations. Therefore, if you are an employee, timekeeper, supervisor or other agency official, or union representative, you should contact your servicing HR office for assistance with any questions you may have. If you are a component HR office, you should contact your agency headquarters office for assistance. If your HR chain of command needs assistance answering your question, inquiries should be directed to OPM through the headquarters HR policy office.