[Federal Register Volume 59, Number 127 (Tuesday, July 5, 1994)]
[Unknown Section]
[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-16127]
[[Page Unknown]]
[Federal Register: July 5, 1994]
VOL. 59, NO. 127
Tuesday, July 5, 1994
OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 575
RIN 3206-AF86
Recruitment and Relocation Bonuses and Retention Allowances
AGENCY: Office of Personnel Management.
ACTION: Proposed rule with request for comments.
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SUMMARY: The Office of Personnel Management (OPM) is issuing proposed
regulations to provide agencies with greater flexibility in paying
recruitment and relocation bonuses and retention allowances (the 3
R's). The proposed regulations revise certain requirements in the
current regulations to maximize agency discretion in using these
flexibilities. The 3 R's were authorized by the Federal Employees Pay
Comparability Act of 1990 (FEPCA).
DATES: Comments must be received on or before August 4, 1994.
ADDRESSES: Comments may be sent or delivered to Donald J. Winstead,
Acting Assistant Director for Compensation Policy, Personnel Systems
and Oversight Group, Office of Personnel Management, Room 6H31, 1900 E
Street NW., Washington, DC 20415.
FOR FURTHER INFORMATION CONTACT:
Belva MacDonald or Lee Kara, (202) 606-1413.
SUPPLEMENTARY INFORMATION: On August 19, 1992, OPM published final
regulations at 57 FR 37394 to authorize the payment of recruitment and
relocation bonuses and retention allowances (the 3 R's) under the
Federal Employees Pay Comparability Act of 1990 (FEPCA). These
regulations finalized interim regulations that were published on March
28, 1991 (56 FR 12833). Overall, use of the 3 R's has been limited.
In a memorandum to the Interagency Advisory Group on October 24,
1991, OPM advised agencies to consider using the 3 R's before
requesting new or increased special salary rates under 5 U.S.C. 5305.
In most situations, the use of the 3 R's to solve staffing problems
will be less expensive than special rates. Special rates are basic pay
for such purposes as retirement benefits, premium pay, and promotions,
whereas the 3 R's are not basic pay for any purposes. The 3 R's are
also generally less expensive than superior qualifications
appointments. Superior qualifications appointments, like special salary
rates, have a lasting effect on future pay entitlements.
When necessary, the 3 R's may be used in combination with special
salary rates and superior qualifications appointments. However, payment
of one of the 3 R's alone may be the most appropriate solution for a
staffing problem. For example, a candidate may prefer a lump-sum
payment to address his or her immediate needs instead of an increase in
basic pay that would be received in relatively small amounts over a
long period of time.
Agencies have found it difficult to use the 3 R's and have
requested changes in the current regulations. OPM also has approved
variations to the requirements bonus regulations. (This is discussed
below under appointments required for recruitment bonus purposes.) OPM
is proposing the regulatory changes discussed below to increase
agencies' discretion in administering the 3 R's.
Recruitment Bonuses
Candidate quality. In Secs. 575.101, 575.104(b)(2), 575.104(c)(1)
and (c)(2) (i) and (iii), and 575.108(b), the current regulations allow
payment of a recruitment bonus only when, in the absence of such a
bonus, agencies would encounter difficulty in filling the position with
a high quality candidate. Same agencies' recruitment needs are not
limited to high quality candidates. Therefore, they have not considered
offering recruitment bonuses before requesting approval of special
salary rates. (OPM approval of special rates is not dependent upon the
recruitment of high quality candidates.) The proposed regulations would
allow an agency to pay a recruitment bonus to any qualified candidate
the agency wishes to recruit for a difficult-to-fill position. The
agency would determine the level of candidate quality it needs to
target.
Length of appointment and service agreement. In Sec. 575.103, the
current definition of ``employee'' for recruitment bonus purposes
requires an appointment of at least 2 years. The proposed regulations
would delete the language regarding the minimum length of appointment;
however, since, in Sec. 575.106(b), the proposed regulations require a
service agreement of at least 6 months, any appointment would have to
be at least that long. Currently, a minimum 12-month service agreement
is required. Reducing the requirement to 6 months would give agencies
more flexibility.
Break-in service. To meet the current definition of ``newly
appointed'' in Sec. 575.103, a candidate with prior Federal Government
service must have a break in service of at least 1 year. The proposed
regulations would reduce this break-in-service restriction to 90 days.
This parallels the 90-day-break-in-service restriction for superior
qualifications appointments in Sec. 531.203(b)(2). It allows agencies
to consider paying a recruitment bonus in more circumstances as an
alternative to paying advanced in-hire rates for superior
qualifications.
The proposed regulations add two authorized exceptions to the
break-in-service rule in Sec. 575.103. The first is a permanent
appointment that follows a provisional appointment (as defined in
Sec. 316.403). The second is an appointment that follows a temporary
appointment, provided the temporary appointment was neither full-time
nor the principal employment of the candidate. This would allow
agencies to pay recruitment bonuses in situations like those approved
by OPM as variations to the current regulations. Under the variations,
bonuses were paid to medical officers who served in temporary
appointments prior to being offered permanent appointments. The medical
officers did not meet the break-in-service requirement under current
regulations. OPM determined that payment of recruitment bonuses was
appropriate because the temporary positions were neither full-time nor
the candidates' principal employment. Also, the inability of the hiring
officials to take advantage of such opportunities would have resulted
in lengthy recruitment efforts to find qualified candidates with the
required specialized skills. (These variations were reported in former
Federal Personnel Manual Bulletins 575-4, April 20, 1993; 575-5,
October 25, 1993; and 575-6, November 12, 1993; and in OPM's
Provisional Notice No. 575-1, May 25, 1994.)
Written determination. In Sec. 575.104(c)(1), the current
regulations for recruitment bonuses require a written determination
made on a case-by-case basis for each employee. The proposed
regulations would allow an agency to make a single written
determination applicable to a group of candidates for positions that
the agency targets as difficult to fill. This would not require OPM's
prior approval.
Reporting requirement. In Sec. 575.108(b), the current regulations
for recruitment bonuses require an annual written report by each agency
on its use of recruitment bonuses. The proposed regulations would
remove this requirement. However, each agency would retain
responsibility for monitoring its use of recruitment bonuses.
Relocation Bonuses
Candidate quality. In Secs. 575.201, 575.204 (c)(1) and (c)(2) (i)
and (iii), and 575.208(b), the current regulations allow payment of a
relocation bonus only when, in the absence of such a bonus, difficulty
would be encountered in filling the position with a ``high quality
candidate.'' As for recruitment bonuses (discussed above), payment of
relocation bonuses should be considered before requesting approval of
special salary rates for difficult-to-fill positions. The proposed
regulations would allow an agency to pay a relocation bonus to any
employee the agency wishes to relocate to a position that would
otherwise be difficult to fill.
Length of appointment. In Sec. 575.203, the current definition of
``employee'' for relocation bonus purposes requires an appointment of
at least 2 years. The proposed regulation would allow the employee's
appointment to be any length of time determined appropriate by the
agency. Also, the proposed definition would make a technical change to
clarify that a relocation bonus may be paid to an employee whose duty
station is changed to a different commuting area permanently as well as
temporarily.
Written determination. In Sec. 575.204(d), the current regulations
provide for exceptions to case-by-case approvals of relocation bonuses
with prior OPM approval. The proposed regulations would allow such
exceptions without prior OPM approval.
Reporting requirement. In Sec. 575.208(b), the current regulations
for relocation bonuses require an annual written report by each agency
on its use of relocation bonuses. The proposed regulations would remove
this requirement.
Retention Allowances
Length of appointment. In Sec. 575.303, the current definition of
``employee'' for retention allowance purposes requires an appointment
of at least 2 years. The proposed regulations would allow the
employee's appointment to be any length of time determined appropriate
by the agency.
Length of service. In Sec. 575.304(a), the current regulations
permit payment of a retention allowance only to an employee who (1) has
completed 1 year of continuous service with the agency immediately
prior to such payment, or (2) has completed a period of employment
established under a service agreement for a recruitment or relocation
bonus. the proposed regulations would allow an agency to pay a
retention allowance to an employee with less than 1 year of continuous
service. However, the proposed regulations continue to require that an
employee under a service agreement for a recruitment or relocation
bonus complete such an agreement before receiving a retention
allowance.
Reason for being likely to leave. In Secs. 575.304(b) and
575.305(c), the current regulations permit payment of a retention
allowance to an employee only if he or she is likely to leave the
Federal service for employment outside the executive, legislative, or
judicial branch of the Federal Government. The proposed regulations
would allow payment of a retention allowance to an employee who is
likely to leave not only for employment outside the Federal Government,
but for a reason other than employment, such as retirement.
Reporting requirement. In Sec. 575.308(b), the current regulations
for retention allowances require an annual written report by each
agency on its use of retention allowances. The proposed regulations
would remove this requirement.
Miscellaneous
In Sec. 575.103, the definition of ``commuting area'' is not
germane to the payment of recruitment bonuses and would be removed by
the proposed regulations. (The definition would remain in Sec. 575.203
for payment of relocation bonuses.) Finally, the proposed regulations
add a new paragraph (d) in Sec. 575.306 to clarify that a retention
allowance is not pay for purposes of a lump-sum payment for annual
leave under 5 U.S.C. 5551. (See Comptroller General opinion B-249816,
March 8, 1993.)
E.O. 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with E.O. 12866.
Regulatory Flexibility Act
I certify that these regulations would not have a significant
economic impact on a substantial number of small entities because they
would apply only to Federal agencies and employees.
List of Subjects in 5 CFR Part 575
Administrative practice and procedure, Government employees, Wages.
James B. King,
Director.
Accordingly, OPM is proposing to amend part 575 of title 5 of the
Code of Federal Regulations as follows:
PART 575--RECRUITMENT AND RELOCATION BONUSES; RETENTION ALLOWANCES;
SUPERVISORY DIFFERENTIALS
1. The authority citation for part 575 continues to read as
follows:
Authority: 5 U.S.C. 1104(a)(2), 5753, 5754, and 5755; sec. 302
and 404 of the Federal Employees Pay Comparability Act of 1990 (Pub.
L. 101-509) 104 Stat. 1462 and 1466, respectively; E.O. 12748.
2. Section 575.101 is revised to read as follows:
Sec. 575.101 Purpose.
This subpart provides regulations to implement 5 U.S.C. 5753, which
authorizes payment of a recruitment bonus of up to 25 percent of basic
pay to a newly appointed employee or an individual to whom a written
offer of employment has been made by the agency, provided there is a
determination that, in the absence of such a bonus, difficulty would be
encountered in filling the position.
3. In Sec. 575.103, the definition of ``commuting area'' is
removed, and the definitions of ``employee'' and ``newly appointed''
are revised to read as follows:
Sec. 575.103 Definitions.
* * * * *
Employee means an employee in or under an agency who is newly
appointed or an individual who has received a written offer of
employment.
* * * * *
Newly appointed refers to--
(a) The first appointment, regardless of tenure, as an employee of
the Federal Government;
(b) An appointment as an employee of the Federal Government
following a break in service of at least 90 days from the candidate's
last period of Federal employment other than--
(1) Employment in a cooperative work-study program under a Schedule
B appointment made in accordance with Sec. 213.3202 of this chapter;
(2) Employment under the Stay-in-School program, in accordance with
Sec. 213.3102(w) of this chapter;
(3) Employment as a law clerk trainee under Sec. 213.3102(e) of
this chapter;
(4) Employment while a student during school vacations under a
short-term temporary appointing authority;
(5) Employment under a provisional appointment designated under
Sec. 316.403 if the new appointment is permanent and immediately
follows the provisional appointment; or
(6) Employment under a temporary appointment that is neither full-
time nor the principal employment of the candidate.
* * * * *
4. In Sec. 575.104, paragraphs (b)(2), (c)(1), and (c)(2) (i) and
(iii) are revised to read as follows:
Sec. 575.104 Agency recruitment bonus plans; higher level review and
approval; and criteria for payment.
* * * * *
(b)(2) When necessary to make a timely offer of employment, a
higher level official may establish criteria for offering recruitment
bonuses in advance and authorize the recommending official to offer a
recruitment bonus (in any amount within a pre-established range) to any
candidate without further review or approval.
(c) Criteria for payment. (1) Each bonus paid under this subpart
shall be based on a written determination that, in the absence of such
a bonus, the agency would encounter difficulty in filling the position.
Such a determination shall be made before any employee actually enters
on duty in the position for which he or she was recruited. An agency
may target groups of positions that have been difficult to fill in the
past or that may be difficult to fill in the future and may make the
required written determination to offer a recruitment bonus on a group
basis.
(2) * * *
(i) The success of recent efforts to recruit candidates for similar
positions, including indicators such as offer acceptance rates, the
proportion of positions filled, and the length of time required to fill
similar positions;
* * * * *
(iii) Labor-market factors that may affect the ability of the
agency to recruit candidates for similar positions now or in the
future;
* * * * *
5. Section 575.106 is revised to read as follows:
Sec. 575.106 Service agreement.
(a) Before a recruitment bonus may be paid, an agency shall require
that the employee sign a written service agreement to complete a
specified period of employment with the appointing agency (or successor
agency in the event of a transfer of function).
(b) The minimum period of employment to be established under a
service agreement for a recruitment bonus shall be 6 months.
6. Section 575.108 is revised to read as follows:
Sec. 575.108 Internal monitoring.
Each agency shall monitor the use of recruitment bonuses to ensure
that its recruitment bonus plan conforms to the requirements
established under this subpart and that the payment of recruitment
bonuses conforms to the criteria established under this subpart.
7. Section 575.201 is revised to read as follows:
Sec. 575.201 Purpose.
This subpart provides regulations to implement 5 U.S.C. 5753, which
authorizes payment of a relocation bonus of up to 25 percent of basic
pay to an employee who must relocate to accept a position in a
different commuting area, provided there is a determination that, in
the absence of such a bonus, difficulty would be encountered in filing
the position.
8. In Sec. 575.203, the definitions of ``employee'' and ``service
agreement'' are revised to read as follows:
Sec. 575.203 Definitions.
* * * * *
Employee means an employee in or under an agency who is appointed
to a position in a different commuting area or whose duty station is
changed permanently or temporarily to a different commuting area.
* * * * *
Service agreement means a written agreement between an agency and
an employee under which the employee agrees to a specified period of
employment with the agency at the new duty station to which relocated
in return for payment of a relocation bonus.
9. In Sec. 575.204, paragraphs (c)(1), (c)(2)(i), (c)(2)(iii), and
(d) are revised to read as follows:
Sec. 575.204 Agency relocation bonus plans; higher level review and
approval; criteria for payment; and exceptions to case-by-case
approval.
* * * * *
(c) Criteria for payment. (1) Each bonus paid under this subpart
shall be based on a written determination that, in the absence of such
a bonus, the agency would encounter difficulty in filling the position.
Each such determination shall be made before the employee actually
enters on duty in the position to which he or she was relocated. An
agency may target groups of positions that have been difficult to fill
in the past or that may be difficult to fill in the future. However,
except as provided in paragraph (d) of this section, any determination
to pay a bonus shall be made on a case-by-case basis for each employee.
(2) * * *
(i) The success of recent efforts to recruit candidates for similar
positions, including indicators such as offer acceptance rates, the
proportion of positions filled, and the length of time required to fill
similar positions;
* * * * *
(iii) Labor market factors that may affect the ability of the
agency to recruit candidates for similar positions now or in the
future; and
* * * * *
(d) Exceptions to case-by-case approval. The head of an agency may
authorize the payment of a relocation bonus to any employee whose
rating of record is at least fully successful without the requirement
for case-by-case approval when--
(1) The employee is a member of a specified group of employees
subject to a mobility agreement, and the head of an agency determines
that relocation bonuses are necessary to ensure the agency's ability to
retain employees subject to such an agreement; or
(2) A major organizational unit of an agency is relocated to a
different commuting area, and the head of an agency determines that
relocation bonuses are necessary for specified groups of employees to
ensure the continued operation of that unit without undue disruption of
an activity or function that is deemed essential to the agency's
mission and/or without undue disruption of service to the public.
10. Section 575.206 is revised to read as follows:
Sec. 575.206 Service agreement.
Before a relocation bonus may be paid, an agency shall require that
the employee sign a written service agreement to complete a specified
period of employment with the appointing agency (or the successor
agency in the event of a transfer of function) at the new duty station.
11. Section 575.208 is revised to read as follows:
Sec. 575.208 Internal monitoring.
Each agency shall monitor the use of relocation bonuses to ensure
that its relocation bonus plan conforms to the requirements established
under this subpart and that the payment of relocation bonuses conforms
to the criteria established under this subpart.
12. In Sec. 575.303, the definition of ``employee'' is revised to
read as follows:
Sec. 575.303 Definitions.
* * * * *
Employee means an employee in or under an agency.
* * * * *
13. In Sec. 575.304, paragraphs (a) and (b) are revised to read as
follows:
Sec. 575.304 Conditions for payment.
(a) If applicable, an agency may pay a retention allowance to an
employee only if the employee has completed a period of employment
established under the service agreement required for payment of a
recruitment bonus under subpart A of this part or a relocation bonus
under subpart B of this part, whichever occurs later.
(b) An agency may pay a retention allowance to an employee if the
employee is likely to leave the Federal service for any reason.
* * * * *
14. In Sec. 575.306, a new paragraph (d) is added to read as
follows:
Sec. 575.306 Payment of retention allowance.
* * * * *
(d) A retention allowance is not pay for purposes of a lump-sum
payment for annual leave under 5 U.S.C. 5551.
15. Section 575.308 is revised to read as follows:
Sec. 575.308 Internal monitoring.
Each agency shall monitor the use of retention allowances to ensure
that its retention allowance plan conforms to the requirements
established under this subpart and that the payment of retention
allowances conforms to the criteria established under this subpart.
[FR Doc. 94-16127 Filed 7-1-94; 8:45 am]
BILLING CODE 6325-01-M
