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A time–off award is time off from duty, without loss of pay or charge to leave, granted to a Federal employee as a form of incentive or recognition. This paper addresses time-off awards in the Federal Government. We provide this information for all Federal employees, particularly supervisors, human resources professionals, performance management program managers, and incentive awards administrators.
Paragraph 4502(e) of title 5, United States Code, states the Office of Personnel Management may by regulation permit agencies to grant employees time off from duty, without loss of pay or charge to leave, as an award in recognition of superior accomplishment or other personal effort that contributes to the quality, efficiency, or economy of Government operations.
Paragraph 451.104(a) of title 5, Code of Federal Regulations, permits agencies to grant time-off award without charge to leave or loss of pay; (consistent with chapter 45 of title 5, United States Code, and these regulations) to an employee, as an individual or member of a group and 451.104(f) prohibits time-off awards from being converted to a cash payment.
Agencies have their own internal policies for establishing and administering time–off awards to enhance their overall awards program and to support the achievement of the agency's goals and mission.
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Time–off awards are a unique form of award agencies can grant Federal employees. (The other forms of awards are cash, honorary items, and informal recognition items). Agencies decide when and how to use time–off awards to enhance their overall awards program and support the achievement of the agency’s goals and mission. Major features of time-off awards include the following:
Most Federal employees are eligible for inclusion in a time–off award program. Federal agencies may grant time–off awards to any Federal civilian employee, either as an individual or member of a group, who meets the definition of employee in Section 2105 of title 5, United States Code. This definition includes an individual appointed in the civil service by —
In addition, to meet the definition of employee, the individual must perform a Federal function and be subject to the supervision of an individual cited above while performing official duties. The definition of employee also includes employees who are individuals employed at the U.S. Naval Academy in specific jobs (see 5 U.S.C. 2105 for a more detailed description).
Individuals who do not meet the definition of employee as defined by 5 U.S.C. 2105 include the following:
These individuals may not receive awards under the authority of chapter 45 of title 5, U.S. Code, unless otherwise authorized and therefore cannot be included in a time–off award program administered under this authority. However, other authorities may allow agencies to grant paid time off to certain categories of employees excluded from 5 U.S.C. 2105. Agencies should consult their human resources offices or General Counsels to find out if they have another authority to grant paid time off to employees who are excluded from the definition of employee in 5 U.S.C. 2105.
Agencies may grant time-off awards for—
Agencies may use time–off awards as incentives or as recognition. Incentives help focus employees on the organization’s goals and promise specific rewards to employees who provide specified results that significantly help to achieve those goals. Incentives identify and communicate goals and reward formulas at the beginning of the performance period. Recognition provides after–the–fact acknowledgement to employees for their accomplishments when there was no previous promise of reward. Recognition signals the types of achievements the organization values. Incentives and recognition may involve individual employees, groups, or entire organizations.
Various employees can receive awards of comparable value. For example, since the "currency" for these awards is time, agencies can award the same number of hours to employees in different grades for the same, or comparable, achievements, thus eliminating any perceived inequity associated with grade differences.
Time–off awards do not have explicit cash value and do not change the employee’s income. As a result, time–off awards are not subject to additional tax withholdings. Agencies deduct tax withholdings from the salary paid during the period the time–off award is used, just as agencies deduct tax withholdings when employees use annual or sick leave or other forms of authorized paid absence.
Time–off awards can be one of the award forms most closely linked to the time and place of the accomplishment. Agency policy may permit immediate supervisors to grant them, and in some situations employees might be able to use them immediately.
Some employees may value paid time off more than a cash award. For example new employees traditionally have lower annual leave balances and may prefer additional paid time off.
Because agencies do not have to provide additional cash outlay with time–off awards, they may not realize the real cost of these awards often can exceed the cost of paying for cash awards. Although agencies budget for salary expenses, managers may overlook the financial impact of time-off awards. A 40 hour time–off award represents about 2 percent of the employee’s total salary (not including benefits) the agency is paying even though the employee is not working. Managers need to take into consideration these hidden costs, especially in terms of productivity lost. Agencies need to ensure they manage the use of time-off awards and take into consideration—
Unlike new employees who have not accumulated much leave, employees with “use or lose” leave may not appreciate a time–off award since additional paid time off may not be something they need as much. In addition, the agency would be losing additional valuable hours from a veteran employee when they use both their award and their “use or lose” hours.
Agencies should consider the possible public perception of time–off awards. It could appear to the public (and to Congress) that an agency that gives substantial, frequent, or large numbers of time–off awards could be overstaffed since it can complete its mission while these employees are absent. Also, agencies must be careful not to abuse the time–off award authority by granting everyone in an organization a time–off award at the same time whether everyone deserves the recognition or not. For example, giving everyone the day after Thanksgiving off and calling it a time–off award without specifying what is being recognized and how everyone has contributed equally, does not, on its face, appear to be a valid use of the time-off award authority.
Unlike other forms of pay for time not worked (e.g., annual and sick leave), employees are not entitled to a time–off award. If an employee transfers from one agency to another, the gaining agency is not obligated to “honor” the time–-off award. Therefore, any unused time–off awards are not transferable, unless a special arrangement is made with the receiving agency to honor the time–off award granted by the employee’s former agency. Also, the losing agency may not convert the time to cash (5 CFR 451.104(f)) and give cash to the employee for the time not taken.
It may be difficult for agencies to monitor and manage the use of time–off awards supervisors grant on the spur of the moment. Once the award has been granted and used, supervisors may forget the need to document it. The Code of Federal Regulations requires agencies to document all cash and time-off awards (5 CFR 451.106(e)) in compliance with instructions in the OPM Operating Manual, The Guide to Processing Personnel Actions.