[Federal Register Volume 62, Number 145 (Tuesday, July 29, 1997)]
[Proposed Rules]
[Pages 40475-40482]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-19774]
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Proposed Rules
Federal Register
________________________________________________________________________
This section of the FEDERAL REGISTER contains notices to the public of
the proposed issuance of rules and regulations. The purpose of these
notices is to give interested persons an opportunity to participate in
the rule making prior to the adoption of the final rules.
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Federal Register / Vol. 62, No. 145 / Tuesday, July 29, 1997 /
Proposed Rules
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 550
RIN 3206-AF38
Pay Administration (General); Lump-Sum Payments for Annual Leave
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 establish a Governmentwide policy for calculating lump-
sum payments for accumulated and accrued annual leave for employees who
separate from the Federal service.
DATES: Comments must be received on or before September 29, 1997.
ADDRESSES: Comments may be sent or delivered to Donald J. Winstead,
Assistant Director for Compensation Policy, Human Resources Systems
Service, Office of Personnel Management, Room 6H31, 1900 E Street NW.,
Washington, DC 20415 (FAX: (202) 606-0824), or email at
payleave@opm.gov.
FOR FURTHER INFORMATION CONTACT: Brenda Roberts, (202) 606-2858, FAX
(202) 606-0824, or email at payleave@opm.gov.
SUPPLEMENTARY INFORMATION: The Technical and Miscellaneous Civil
Service Amendments Act of 1992 (Pub. L. 102-378, October 2, 1992) added
section 5553 to title 5, United States Code, to give the Office of
Personnel Management regulatory authority for the administration of
lump-sum payments for accumulated and accrued annual leave. Under 5
U.S.C. 5551 and 5552, such lump-sum payments are made when an employee
(1) separates from the Federal service or (2) enters on active duty in
the armed forces and elects to receive a lump-sum payment for
accumulated and accrued annual leave. The lump-sum payment must equal
the pay the employee would have received had he or she remained
employed until expiration of the period of annual leave.
Section 6306 of title 5, United States Code, provides that when an
employee is reemployed in the Federal service prior to the expiration
of the lump-sum period, he or she must refund an amount equal to the
pay covering the period between the date of reemployment and the
expiration of the lump-sum period. In addition, an amount of annual
leave equal to the days or hours of work remaining between the date of
reemployment and the expiration of the lump-sum leave period is
recredited to the employee. OPM is authorized to regulate this
requirement by 5 U.S.C. 6311.
OPM recognizes that agencies currently calculate lump-sum payments
for annual leave and refunds based on their interpretation of the broad
statutory language in 5 U.S.C. 5551, 5552, and 6306; OPM's regulations
on lump-sum payments for employees who receive nonforeign area cost-of-
living allowances, post differentials, or availability pay; and
additional guidance provided by the former Federal Personnel Manual,
Comptroller General opinions, court decisions, and the Federal Wage
System Operating Manual. Consequently, agencies may not have consistent
policies for including some types of pay in lump-sum payments for
annual leave. On March 3, 1995, OPM asked Directors of Personnel for
assistance in developing proposed regulations on lump-sum payments for
annual leave. We received comments from 30 agencies. Agency opinions
varied widely on what types of pay should be included in or excluded
from lump-sum payments. After careful consideration of all agency
comments, we are proposing Governmentwide rules for determining how
lump-sum payments should be calculated. The proposed regulations are
designed to ensure that lump-sum payments are calculated consistently
throughout the Federal Government. When OPM issues final regulations on
lump-sum payments for annual leave, they will not be made retroactive.
The final regulations will apply only to lump-sum payments made by an
agency on or after the effective date of the final regulations. The
following paragraphs summarize the major provisions of the proposed
regulations.
Employees Eligible for a Lump-Sum Payment
Generally, an employee is entitled to a lump-sum payment for
accumulated and accrued annual leave when he or she (1) separates or
retires from Federal service; (2) dies; or (3) transfers to a position
that is not covered by subchapter I of chapter 63 of title 5, United
States Code, or to a position that is covered by a different leave
system, when his or her accumulated and accrued annual leave cannot be
transferred. In addition, section 1611 of Pub. L. 104-201, September
23, 1996, added paragraph (c) to 5 U.S.C. 5551 to require the
Department of Defense (DOD) to pay a lump-sum payment to an employee
for any unused annual leave that was restored under 5 U.S.C. 6304(d)(3)
when the employee (1) transfers to a position in any other department
or agency of the Federal Government or (2) moves to a position within
DOD not located at an installation undergoing closure or realignment.
This new entitlement to a lump-sum payment for certain DOD employees
became effective on September 23, 1996.
There are five exceptions to the general rule that employees who
separate, die, or transfer are entitled to a lump-sum payment:
(1) An employee who enters on active duty in the armed forces may
elect to receive a lump-sum payment for accumulated and accrued annual
leave or may request that the annual leave remain to his or her credit
until he or she returns from active duty.
(2) An employee in a missing status (as defined in 5 U.S.C.
5561(5)) on or after January 1, 1965, is entitled to receive a lump-sum
payment for accumulated and accrued annual leave upon return or may
elect to have the annual leave restored in a separate leave account
under 5 U.S.C. 6304(d)(2). The lump-sum payment is computed based on
the pay in effect at the time the annual leave became subject to
forfeiture.
(3) An employee who transfers to a position excepted from
subchapter I of chapter 63 of title 5, United States Code, by 5 U.S.C.
6301(2)(x)-(xiii) (i.e., certain Presidential appointees or designees)
may not receive a lump-sum payment upon appointment to the new
position. The annual leave must be held in abeyance for recredit if the
employee is
[[Page 40476]]
subsequently reemployed without a break in service in a position to
which his or her annual leave may be transferred. If the employee does
not return to a position to which his or her annual leave can be
transferred and later becomes eligible for a lump-sum payment, the
lump-sum payment is computed based on the pay in effect at the time the
employee initially transferred to the excepted position. The lump-sum
period is projected beginning on the effective date of the employee's
separation, death, or transfer.
(4) An employee who transfers to a position not covered by the
Federal leave system established under chapter 63 of title 5, United
States Code, and to which only a portion of his or her annual leave may
be transferred, will have the remaining annual leave held in abeyance
for recredit until he or she is subsequently reemployed without a break
in service in a position to which his or her annual leave may be
transferred. If the employee does not return to a position to which his
or her annual leave can be transferred and later becomes eligible for a
lump-sum payment, the lump-sum payment is computed based on the rate in
effect at the time the employee initially transferred to the position
to which only a portion of his or her annual leave could be
transferred. The lump-sum payment is paid by the current employing
agency. The lump-sum period is projected beginning on the effective
date of the employee's separation, death, or transfer.
(5) An employee who has been determined by an agency to be in a
continuing employment program under which the employee is required to
work a ``mixed tour of duty'' will have his or her annual leave held in
abeyance during intermittent duty and recredited when he or she returns
to full-time or part-time employment. If the employee separates,
transfers, or dies during the period of intermittent employment, he or
she is entitled to a lump-sum payment for the annual leave held in
abeyance. (A ``mixed tour of duty'' is a condition of employment for
positions in which a fluctuating workload requires an employee to work
full-time or part-time for a portion of the year and intermittent for
the remainder.)
Employees not Eligible for a Lump-Sum Payment
An employee is not entitled to a lump-sum payment for accumulated
and accrued annual leave when he or she (1) transfers between positions
covered by subchapter I of chapter 63 of title 5, United States Code,
except as provided by 5 U.S.C. 5551(c); (2) transfers to a position not
covered by subchapter I of chapter 63 of title 5, United States Code,
but to which his or her accumulated and accrued annual leave may be
transferred under 5 U.S.C. 6308; (3) transfers to the government of the
District of Columbia or the U.S. Postal Service; or (4) is concurrently
employed in more than one part-time position and who separates from one
of the part-time positions. (If an employee is employed in part-time
positions in different agencies, the annual leave accumulated and
accrued in the agency from which the employee separates must be
transferred to the current employing agency.)
Projecting the Lump-Sum Leave Period
A lump-sum payment for accumulated and accrued annual leave equals
the pay an employee would have received had he or she remained in the
service until expiration of the period of annual leave. The period of
leave used for calculating the lump-sum payment may not be extended due
to any holiday occurring after separation. Annual leave donated under
the Federal voluntary leave transfer and leave bank programs may not be
included in a lump-sum payment and does not serve to extend the lump-
sum leave period. (See 5 CFR 630.909(e)(2) and 630.1009(e)(1).)
Compensatory time off and unused credit hours accumulated under a
flexible work schedule are not annual leave. Therefore, they are not
included in a lump-sum payment and do not serve to extend the lump-sum
leave period. Any remaining compensatory time off or credit hours (not
in excess of 24) may be paid separately as part of a final salary
payment when an employee separates. (See 5 CFR 550.114(d) and
551.531(d) and 5 U.S.C. 6126.)
The lump-sum payment is projected beginning on the first workday
(counting any holiday) occurring after the date of separation, death,
or transfer, as applicable, and including subsequent workdays and
holidays. An agency must project the lump-sum leave period so that any
annual leave restored under 5 U.S.C. 6304(d) is used before projecting
any accumulated annual leave to the employee's credit in his or her
regular annual leave account. (Under 5 CFR 630.306 and 630.309, annual
leave that is restored must be used by a certain date. Projecting the
lump-sum leave period so that restored annual leave is used before
regular annual leave will preclude the forfeiture of restored annual
leave for employees who are reemployed in the Federal service prior to
the expiration of the lump-sum leave period.)
Calculating the Lump-Sum Payment
Under 5 U.S.C. 5551, ``the lump-sum payment shall equal the pay
(excluding any differential under section 5925 and any allowance under
section 5928) the employee or individual would have received had he
remained in the service until expiration of the period of the annual or
vacation leave.'' The term ``pay'' is not further defined in law. In
these proposed regulations, we have attempted to offer an
interpretation of the ``pay'' to be included in a lump-sum payment that
is consistent with former Federal Personnel Manual guidance,
Comptroller General opinions, and agency practices.
The proposed regulations provide that the following types of pay
and adjustments are to be included in a lump-sum payment for annual
leave:
(1) An employee's rate of basic pay. An employee's rate of basic
pay is defined as the rate fixed by law or administrative action for
the position held by the employee and includes any applicable special
salary rate established under 5 U.S.C. 5305 or similar provision of law
or a special rate for law enforcement officers under section 403 of the
Federal Employees Pay Comparability Act of 1990; a locality rate of pay
under subpart F of part 531 of title 5, Code of Federal Regulations; a
special law enforcement adjusted rate of pay under subpart C of part
531, including a rate continued under Sec. 531.307; and any continued
rate of pay under subpart G of part 531.
(2) Any statutory adjustments in pay and any general system-wide
increases in pay that are authorized by law (or the President's
alternative plan) under sections 5303, 5304, 5304a, 5305, 5318, 5363,
5372, 5372a, 5376, 5382, or 5392 of title 5, United States Code, prior
to the date of separation, death, or transfer and which become
effective during the lump-sum leave period. The lump-sum payment is
adjusted to reflect the increased rate beginning on the effective date
of the pay adjustment.
(3) For a prevailing rate employee, the scheduled rate of pay under
5 U.S.C. 5343 and any applicable wage adjustment that is determined
under 5 U.S.C. 5343 if the employee separates, dies, or transfers after
issuance of an official order to conduct a wage survey for his or her
applicable wage area in accordance with 5 CFR 532.231(d)(3)
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and which becomes effective during the lump-sum leave period. The lump-
sum payment is adjusted to reflect the increased rate beginning on the
effective date of the wage adjustment.
(4) A within-grade increase authorized under 5 U.S.C. 5335 (if the
employee's work is of an acceptable level of competence) or under 5
U.S.C. 5343(e)(2) (if the employee's work performance rating is
satisfactory or better) and the employee has completed the required
waiting period prior to separation, death, or transfer. (See 5 CFR
531.404 and 532.417.)
(5) Annual premium pay for standby duty (5 U.S.C. 5545(c)(1)),
annual premium pay for administratively uncontrollable overtime (AUO)
work (5 U.S.C. 5545(c)(2)), and availability pay for criminal
investigators (5 U.S.C. 5545a). The lump-sum payment is calculated
using the percentage rate received by the employee immediately prior to
separation, death, or transfer.
(6) For certain employees, night pay earned for nonovertime hours
(5 U.S.C. 5545), Sunday premium pay (5 U.S.C. 5546(a)), and night
differential for prevailing rate employees earned during nonovertime
hours (5 U.S.C. 5343(f)).
The amount of night pay and/or Sunday premium pay to include in a
lump-sum payment is based on the average amount of night pay and/or
Sunday premium pay earned by the employee during the 12 administrative
workweeks immediately prior to separation, death, or transfer (or a
lesser period if the employee was not employed for the full 12 weeks
prior to separation, death, or transfer).
Night differential for prevailing rate employees is included for
all regularly scheduled nonovertime periods of night shift duty covered
by the unused annual leave as if the employee had continued to work
beyond the effective date of separation. The night shift differential
is paid at the percentage rate received by the employee for the last
full workweek immediately prior to separation. When a night shift has
been formally canceled or an employee has been regularly scheduled for
continuous day shift work on or before the date of separation, the
lump-sum leave payment is computed on the day rate.
As a result of the decision in Armitage, et. al. v. United States
(Fed. Cir. No. 92-5157, April 12, 1993), employees who are regularly
scheduled to work on Sunday are entitled to Sunday premium pay for
periods of paid leave. Based on this decision, OPM revised its
regulations in December 1994 to require the payment of Sunday premium
pay for periods of paid leave or excused absence (5 CFR 550.171). Under
the proposed regulations, certain employees covered by the Armitage
decision are entitled to include night pay earned during nonovertime
hours, Sunday premium pay, and night differential for prevailing rate
employees earned during nonovertime hours in their lump-sum payments
for annual leave.
However, recently enacted legislation prohibits the use of funds
appropriated by the Treasury, Postal Service, and General Government
Appropriations Act, 1997, as contained in section 101(f) of Public Law
104-208, the Omnibus Consolidated Appropriations Act, 1997, for the
payment of Sunday premium pay and night differential pay to employees
who do not actually perform work during the time corresponding to such
Sunday premium or night differential pay. This provision became
effective on September 30, 1996, and will expire on September 30, 1997,
unless legislation is enacted to continue it. Employees covered by this
Act may not receive Sunday premium and night differential pay during
periods of paid leave. The restriction on paying Sunday premium pay
during periods when work is not performed has been in effect for
employees of the Federal Aviation Administration under the
Transportation and Related Agencies Appropriations Acts for fiscal
years 1995, 1996, and 1997.
(7) Overtime pay under the Fair Labor Standards Act of 1938, as
amended (FLSA), for overtime hours regularly scheduled during an
employee's uncommon tour of duty as defined in 5 CFR 630.201.
(8) Nonforeign area cost-of-living allowances under 5 U.S.C. 5941,
nonforeign area post differentials under 5 U.S.C. 5941, and foreign
area post allowances under 5 U.S.C. 5924(1) (as authorized by section
220 of the U.S. Department of State's Standardized Regulations
(Government Civilians, Foreign Areas)) if the employee was receiving
such differential or allowance immediately prior to separation, death,
or transfer in the nonforeign or foreign area. Current OPM regulations
in 5 CFR 591.210(b)(1) already require a nonforeign area cost-of-living
allowance and a nonforeign post differential to be included in a lump-
sum payment if the employee separates in the nonforeign area. However,
it should be noted that 5 U.S.C. 5551 specifically excludes a foreign
area post differential (5 U.S.C. 5925) and foreign area danger pay (5
U.S.C. 5928) from lump-sum payments for annual leave.
OPM proposes to delegate authority to the head of each agency to
determine other kinds of pay authorized in statutes other than title 5,
United States Code, that should be included in a lump-sum payment,
consistent with 5 U.S.C. 5551, 5552, and 6306. No other types of pay or
pay adjustments may be included in a lump-sum payment for annual leave
unless specifically authorized by the head of an agency through the
authority delegated by OPM.
Refund of Lump-Sum Payment
Under 5 U.S.C. 6306, when an employee who receives a lump-sum
payment for accumulated and accrued annual leave under 5 U.S.C. 5551 is
reemployed in the Federal service prior to the end of the period
covered by the lump-sum payment, the employee must refund to the
employing agency an amount equal to the payment covering the period
between the date of reemployment and the expiration of the lump-sum
period. This rule applies whether an employee is reemployed in a
position covered by chapter 63 of title 5, United States Code, or a
different formal leave system. The refund is based on the pay used to
compute the lump-sum payment; e.g., an employee who received a lump-sum
payment based on the pay for a GS-11 position must refund the lump-sum
payment based on the same GS-11 pay, even if he or she is reemployed at
a lower or higher grade level. The refund is deposited in the Treasury
of the United States to the credit of the employing agency.
An agency may permit an employee to refund the lump-sum payment for
annual leave in installments. If an agency permits the lump-sum refund
to be paid in installments, the employee must pay the lump-sum payment
refund in full within 1 year after the date of reemployment. The annual
leave will be recredited to the employee's annual leave account on the
date the refund is paid in full.
An employee who is reemployed in the Federal service after the
expiration of the lump-sum period is not required to refund any portion
of a lump-sum payment. An employee who is reemployed prior to the
expiration of the lump-sum period in a Federal position that does not
have a formal leave system and whose annual leave cannot be recredited
is not required to refund any portion of a lump-sum payment. Under 5
U.S.C. 6306(a), an employee who is reemployed in a position listed in 5
U.S.C. 6301(2)(ii), (iii), (vi), or (vii) (i.e., an intermittent
position; a temporary, hourly-rate position in construction work; a
position as an employee of either or both Houses of Congress; or
certain positions in corporations supervised by
[[Page 40478]]
the Farm Credit Administration) is not required to refund any portion
of a lump-sum payment.
Recredit of Annual Leave
When an individual is reemployed in the Federal service prior to
the expiration of the lump-sum leave period in a position covered by
subchapter I of chapter 63 of title 5, United States Code, an amount of
annual leave equal to the days or hours of work remaining between the
date of reemployment and the expiration of the lump-sum leave period
must be recredited to the employee by the employing agency. Upon full
payment of the lump-sum payment refund, the agency must recredit the
employee's annual leave to his or her account. The recredited annual
leave is available for use by the employee on or after the date it is
recredited.
When an individual is reemployed in the Federal service prior to
the expiration of the lump-sum leave period in a position covered by a
different formal leave system, the amount of annual leave to be
recredited to the employee by the employing agency must be converted
based on the rules for recrediting annual leave in 5 CFR 630.501(b).
If any part of the lump-sum refund is for a period of annual leave
restored under 5 U.S.C. 6304(d), the restored leave is credited in a
separate leave account, and the expiration date for its use is the same
date as that originally established during the former employment. If
the originally established expiration date for the restored leave
occurs before the date of reemployment, a refund is required for all of
the unexpired portion, but none of that restored leave may be
recredited. Therefore, an agency may wish to consider delaying the date
of reemployment until expiration of the period represented by restored
annual leave.
In most cases, the annual leave recredited is subject to the
maximum annual leave limitation in 5 U.S.C. 6304(a), (b), (c), or (f),
as appropriate, for the position in which reemployed. For example, if
an employee is reemployed in a position covered by 5 U.S.C. 6304(a),
the maximum annual leave limitation is 240 hours. If the annual leave
to be recredited is in excess of the maximum annual leave ceiling
permitted for the position in which reemployed, a new maximum leave
ceiling is established for the employee as follows:
(1) If the maximum leave ceiling in the former position (prior to
separation or transfer) is higher than the maximum leave ceiling in the
current position in which reemployed, a new maximum annual leave
ceiling is established at the lesser of: (a) The employee's former
maximum annual leave ceiling at the time of separation or transfer, or
(b) the amount of annual leave to be recredited. The employee's new
maximum leave ceiling is subject to reduction in the same manner as
provided in 5 U.S.C. 6304(c) until the employee's accumulated annual
leave is equal to or less than the maximum leave ceiling for the
position in which reemployed.
(2) If a member of the Senior Executive Service (SES) had a
personal leave ceiling established under 5 CFR 630.301(d) prior to
separation or transfer that is higher than the maximum leave ceiling in
the current position in which employed, a new personal leave ceiling is
established at the lesser of: (a) The employee's personal leave ceiling
established under 5 CFR 630.301(d) prior to separation or transfer, or
(b) the amount of annual leave to be recredited. The new personal leave
ceiling is subject to reduction in the same manner as provided in 5
U.S.C. 6304(c) until the employee's accumulated annual leave is equal
to or less than the maximum leave ceiling for the position in which
reemployed.
Under 5 U.S.C. 6306(b), when an employee is reemployed in a
position listed in 5 U.S.C. 6301(2)(x)-(xiii) (i.e., certain
Presidential appointees or designees), the amount of annual leave to be
recredited is to be held in abeyance and remain to the employee's
credit. The employee will receive a lump-sum payment for the annual
leave if he or she later separates, transfers, or dies. If, instead,
the employee transfers to a position covered by chapter 63 of title 5,
or to a position covered by a different formal leave system, the annual
leave to the employee's credit must be recredited to the employee by
the employing agency.
Income Tax and Deductions
Under 5 U.S.C. 5551, a lump-sum payment to a separated or
transferred employee is considered pay for income tax purposes. A lump-
sum payment is not subject to deductions for retirement under the Civil
Service Retirement System or the Federal Employees Retirement System,
health benefits under the Federal Employees Health Benefits program,
life insurance under the Federal Employees Group Life Insurance
program, or savings under the Thrift Savings Plan. An employee does not
accrue leave for the period covered by the lump-sum payment. Finally, a
lump-sum payment is subject to garnishment under parts 581 and 582 of
title 5, Code of Federal Regulations, and to administrative offset (for
collection of debts to the Federal Government under part 102 of title
4, Code of Federal Regulations).
Regulatory Flexibility Act
I certify that these regulations will not have a significant
economic impact on a substantial number of small entities because they
will affect only Federal employees and agencies.
List of Subjects in 5 CFR Part 550
Administrative practice and procedure, Claims, Government
employees, Wages.
Office of Personnel Management.
James B. King,
Director.
Accordingly, OPM is proposing to amend part 550 of title 5 of the
Code of Federal Regulations as follows:
PART 550--PAY ADMINISTRATION (GENERAL)
1. Subpart L is added to read as follows:
Subpart L--Lump-sum Payment for Accumulated and Accrued Annual Leave
550.1201 Purpose, applicability, and administration.
550.1202 Definitions.
550.1203 Eligibility.
550.1204 Projecting the lump-sum leave period.
550.1205 Calculating a lump-sum payment.
550.1206 Refund of lump-sum payment and recredit of annual leave.
Subpart L--Lump-sum Payment for Accumulated and Accrued Annual
Leave
Authority: 5 U.S.C. 5553, 6306, and 6311.
Sec. 550.1201 Purpose, applicability, and administration.
(a) Purpose. This subpart provides regulations to implement
sections 5551, 5552, and 6306 of title 5, United States Code, and must
be read together with those sections. 5 U.S.C. 5551 and 5552 provide
for a lump-sum payment for accumulated and accrued annual leave when an
employee enters on active duty in the armed forces and elects to
receive a lump-sum payment for accumulated and accrued annual leave or
separates from Federal service. 5 U.S.C. 6306 requires that when an
employee is reemployed in the Federal service prior to the expiration
of the lump-sum period, he or she shall refund an amount equal to the
pay covering the period between the date of reemployment and the
expiration of the lump-sum period.
[[Page 40479]]
(b) Applicability. This subpart applies to--
(1) Any employee who separates, dies, or transfers under the
conditions prescribed in Sec. 550.1203; and
(2) Any employee or any individual employed by a territory or
possession of the United States who enters on active duty in the armed
forces and who elects to receive a lump-sum payment for accumulated and
accrued annual leave.
(c) Administration. The head of an agency having employees subject
to this subpart shall be responsible for the proper administration of
this subpart.
Sec. 550.1202 Definitions.
In this subpart--
Accumulated and accrued annual leave means any annual leave
accumulated and accrued, as these terms are defined in Sec. 630.201 of
this chapter, plus any annual leave credited to an employee under 5
U.S.C. 6304(c) and Sec. 630.301(d) of this chapter and any annual leave
restored under 5 U.S.C. 6304(d). Accumulated and accrued annual leave
does not include annual leave received by a leave recipient under the
voluntary leave transfer and leave bank programs under subchapters III
and IV of chapter 63 of title 5, United States Code, and annual leave
advanced to an employee under 5 U.S.C. 6302(d).
Administrative workweek has the meaning given that term in
Sec. 610.102 of this chapter.
Agency means--
(1) An executive agency and a military department as defined in
sections 105 and 102 of title 5, United States Code, respectively; and
(2) A legislative or judicial agency or a unit of the legislative
or judicial branch of the Government that has positions in the
competitive service.
Employee has the meaning given that term in 5 U.S.C. 2105.
Lump-sum payment means a final payment to an employee for
accumulated and accrued annual leave.
Mixed tour of duty means a condition of employment for positions in
which a fluctuating workload requires an employee to work full-time or
part-time for a limited portion of the year and intermittent for the
remainder.
Rate of basic pay means the rate of pay fixed by law or
administrative action for the position held by an employee before any
deductions and exclusive of additional pay of any kind.
Transfer means the movement of an employee to another position
without a break in service of 1 or more workdays.
Sec. 550.1203 Eligibility.
(a) A lump-sum payment for accumulated and accrued annual leave
shall be paid when an employee--
(1) Separates or retires from the Federal service;
(2) Dies; or
(3) Except as provided in paragraphs (c), (d), and (e), of this
section, transfers to a position that is not covered by subchapter I of
chapter 63 of title 5, United States Code, or to a position that is
covered by a different leave system, when his or her accumulated and
accrued annual leave cannot be transferred.
(b) An employee who has unused annual leave that was restored under
5 U.S.C. 6304(d)(3) shall receive a lump-sum payment for the restored
annual leave from the Department of Defense (DOD) when the employee
transfers to a position in any other department or agency of the
Federal Government or moves to a position within DOD not located at an
installation undergoing closure or realignment.
(c) An employee who enters on active duty in the armed forces may
elect to receive a lump-sum payment for accumulated and accrued annual
leave or may request that his or her annual leave remain to his or her
credit until return from active duty. However, any annual leave
previously restored under 5 U.S.C. 6304(d) may not be credited and may
be paid in a lump-sum payment when the employee enters active duty.
(d) An employee who transfers to a position in a public
international organization under 5 U.S.C. 3582 may elect to receive a
lump-sum payment for accumulated and accrued annual leave or may
request that his or her annual leave be held in abeyance for recredit
upon reemployment without a break in service in the Federal service. If
the employee chooses to receive a lump-sum payment and is reemployed in
the Federal service within 6 months after transfer to a public
international organization, he or she shall refund the amount of the
lump-sum payment to the agency. An amount of leave equal to the leave
represented by the refund shall be credited to the employee's account
under Sec. 550.1206.
(e) Except as provided in paragraph (d)(1) of this section, an
employee who transfers to a position excepted from subchapter I of
chapter 63 of title 5, United States Code, by 5 U.S.C. 6301(2) (x)-
(xiii) shall not receive a lump-sum payment upon appointment to the new
position. The accumulated and accrued annual leave shall be held in
abeyance for recredit when the employee is subsequently reemployed
without a break in service in a position to which his or her
accumulated and accrued annual leave may be transferred.
(f) An employee shall receive a lump-sum payment for any annual
leave restored under 5 U.S.C. 6304(d) upon transfer to a position
excepted by 5 U.S.C. 6301(2) (x)-(xiii). If the employee later becomes
eligible for a lump-sum payment under the conditions specified in this
section, a lump-sum payment shall be paid at that time for the annual
leave held in abeyance. The lump-sum payment shall be computed under
Sec. 550.1205(b) based on the pay the employee was receiving
immediately before the date of the transfer to the position excepted by
5 U.S.C. 6301(2) (x)-(xiii).
(g) An employee who transfers to a position that is not covered by
subchapter I of chapter 63 of title 5, United States Code, and to which
only a portion of his or her accumulated and accrued annual leave may
be transferred, shall have the annual leave that cannot be transferred
held in abeyance for recredit when the employee is subsequently
employed without a break in service in a position to which his or her
accumulated and accrued annual leave may be transferred. If the
employee later becomes eligible for a lump-sum payment under the
conditions specified in this section, a lump-sum payment shall be paid
at that time for the annual leave held in abeyance. The lump-sum
payment shall be computed under Sec. 550.1205(b) based on the pay the
employee was receiving immediately before the date the transfer became
effective. The employee's current employing agency shall compute and
pay the lump-sum payment.
(h) An employee in a missing status (as defined in 5 U.S.C.
5561(5)) on or after January 1, 1965, shall receive a lump-sum payment
for accumulated and accrued annual leave or may elect to have such
annual leave restored in a separate leave account under 5 U.S.C.
6304(d)(2) upon his or her return to Federal service. The lump-sum
payment shall be computed under Sec. 550.1205(b) based on the rate of
pay in effect at the time the annual leave became subject to forfeiture
under 5 U.S.C. 6304(a), (b), or (c).
(i) A lump-sum payment for accumulated or accrued annual leave
shall not be paid to--
(1) An employee who transfers between positions covered by
subchapter I of chapter 63 of title 5, United States Code, except to
the extent provided by paragraph (b) of this section;
(2) An employee who transfers to a position not covered by
subchapter I of chapter 63 of title 5, United States Code, but to which
his or her accumulated and
[[Page 40480]]
accrued annual leave may be transferred;
(3) An employee who transfers to the government of the District of
Columbia or the U.S. Postal Service;
(4) An employee who is concurrently employed in more than one part-
time position and who separates from one of the part-time positions, in
which case (if the part-time positions are in different agencies) the
annual leave accumulated and accrued in the agency from which the
employee separates shall be transferred to the current employing
agency;
(5) A nonappropriated fund employee of the Department of Defense or
the Coast Guard who moves without a break in service of more than 3
days to an appropriated fund position within the Department of Defense
or the Coast Guard, respectively, under 5 U.S.C. 6308(b); or
(6) An employee who is determined by an agency to be in a
continuing employment program under which the employee is required to
work a mixed tour of duty. (The annual leave shall be held in abeyance
during intermittent duty and recredited when the employee returns
without a break in service to full-time or part-time employment. In
addition, any fractional hours of creditable service for annual leave
accrual purposes under Sec. 630.204 of this chapter shall be held in
abeyance and recredited when the employee returns to full-time or part-
time employment.)
Sec. 550.1204 Projecting the lump-sum leave period.
(a) A lump-sum payment shall equal the pay an employee would have
received if he or she had remained in the Federal service until the
expiration of the accumulated and accrued annual leave to the
employee's credit. The lump-sum period shall be projected beginning on
the first workday (counting any holiday) occurring after the date of
separation, death, or transfer under the conditions prescribed in
Sec. 550.1203 and shall continue counting all subsequent workdays and
holidays until the expiration of the period of annual leave. The period
of leave used for calculating the lump-sum payment shall not be
extended by any holidays under 5 U.S.C. 6103 or applicable Executive
order occurring after the date of separation, death, or transfer;
annual leave donated to an employee under the leave transfer or leave
bank programs under subparts I and J of part 630 of this chapter;
compensatory time off earned under 5 U.S.C. 5543 and Secs. 550.114(d)
or 551.531; or credit hours accumulated under an alternative work
schedule under 5 U.S.C. 6126.
(b) For employees whose annual leave was held in abeyance
immediately prior to becoming eligible for a lump-sum payment, the
lump-sum payment shall be projected beginning on the first workday
occurring after the date of separation, death, or transfer under the
conditions prescribed in Sec. 550.1203.
(c) An agency shall project the lump-sum leave period so that any
annual leave restored under 5 U.S.C. 6304(d) in a separate leave
account expires before projecting any accumulated annual leave to the
employee's credit in his or her regular annual leave account.
Sec. 550.1205 Calculating a lump-sum payment.
(a) A lump-sum payment shall be computed based on the types of pay
in paragraph (b) of this section in effect at the time an employee
becomes eligible for a lump-sum payment under the conditions prescribed
in Sec. 550.1203 and any adjustments in pay included in paragraphs (b)
(2), (3), and (4) of this section. An agency shall calculate a lump-sum
payment by multiplying the number of hours of accumulated and accrued
annual leave by the applicable hourly rate of pay, including types of
pay listed in paragraph (b) of this section, or by using a
mathematically equivalent method, such as multiplying weeks of annual
leave by the applicable weekly rate of pay. If a lump-sum payment is
calculated using weekly rates, the number of weeks of annual leave must
be rounded to the fourth decimal place (e.g., 0.4444). An annual rate
of pay shall be converted to an hourly rate of pay by dividing the
annual rate of pay by 2,087 and rounding to the nearest cent, counting
one-half cent and over as the next higher cent.
(b) A lump-sum payment shall be computed using the following types
of pay and pay adjustments, as applicable:
(1) The greatest of the following rates of pay:
(i) An employee's rate of basic pay, including any applicable
special salary rate established under 5 U.S.C. 5305 or similar
provision of law or a special rate for law enforcement officers under
section 403 of the Federal Employees Pay Comparability Act of 1990
(FEPCA), Public Law 101-509, 104 Stat. 1465;
(ii) A locality rate of pay under subpart F of part 531 of this
chapter or similar provision or law, where applicable;
(iii) A special law enforcement adjusted rate of pay under subpart
C of part 531 of this chapter, where applicable, including a rate
continued under Sec. 531.307 of this chapter; or
(iv) A continued rate of pay under subpart G of part 531 of this
chapter.
(2) Any statutory adjustments in pay or any general system-wide
increases in pay that are authorized by law or the President's
alternative plan, such as adjustments under sections 5303, 5304, 5305,
5318, 5363, 5372, 5372a, 5376, 5382, or 5392 of title 5, United States
Code, prior to the date of separation, death, or transfer, and which
become effective during the lump-sum leave period. The lump-sum payment
shall be adjusted to reflect the increased rate on and after the
effective date of the pay adjustment.
(3) In the case of a prevailing rate employee, a lump-sum payment
shall include the scheduled rate of pay under 5 U.S.C. 5343 and any
applicable adjustments in prevailing rates that are determined under 5
U.S.C. 5343 when the employee separates after issuance of an official
order to conduct a wage survey for his or her applicable wage area in
accordance with 5 CFR 532.231(d)(3) and which become effective during
the lump-sum leave period. The lump-sum payment shall be adjusted to
reflect the increased prevailing rate on and after the effective date
of the rate adjustment.
(4) A within-grade increase under 5 U.S.C. 5335 or 5 U.S.C.
5343(e)(2) if the employee has met the requirements of Sec. 531.404 or
Sec. 532.417 of this chapter prior to separation, death, or transfer,
as applicable.
(5) The following types of premium pay:
(i) Night differential under 5 U.S.C. 5343(f) for nonovertime hours
at the percentage rate received by a prevailing rate employee for the
last full workweek immediately prior to separation, death, or transfer;
(ii) Night pay under 5 U.S.C. 5545 for nonovertime hours based on
the average amount of night pay received by an employee during the 12
workweeks immediately prior to the date the employee became eligible
for a lump-sum payment (or a lesser period if the employee was not
employed in the position for at least 12 workweeks immediately prior to
the date he or she became eligible for a lump-sum payment);
(iii) Sunday premium pay under 5 U.S.C. 5546(a) for nonovertime
hours on Sunday based on the average amount of Sunday premium pay
received by the employee during the 12 workweeks immediately prior to
the date the employee became eligible for a lump-sum payment (or a
lesser period if the employee was not employed in the position for at
least 12 workweeks immediately prior to the date the
[[Page 40481]]
employee became eligible for a lump-sum payment); and
(iv) Premium pay under 5 U.S.C. 5545(c) or 5545a if the employee
was receiving premium pay immediately prior to separation, death, or
transfer under the conditions prescribed in Sec. 550.1203. The lump-sum
payment shall be based on the percentage rate received by the employee
immediately prior to separation, death, or transfer.
(6) Overtime pay under the Fair Labor Standards Act of 1938, as
amended (FLSA), for overtime work that is regularly scheduled during an
employee's established uncommon tour of duty as defined in Sec. 630.201
of this chapter if such uncommon tour of duty was applicable to the
employee immediately prior to separation, death, or transfer under the
conditions prescribed in Sec. 550.1203. The lump-sum payment shall
include the amount of FLSA overtime pay for regularly scheduled
overtime work ordered or approved at the time of separation, death, or
transfer.
(7) A cost-of-living allowance and/or post differential in a
nonforeign area under 5 U.S.C. 5941 if the employee was receiving the
allowance and/or post differential immediately prior to separation,
death, or transfer in the nonforeign area.
(8) A post allowance in a foreign area under 5 U.S.C. 5924(1) and
the Standardized Regulations (Government Civilians, Foreign Areas) if
the employee was receiving the post allowance immediately prior to
separation, death, or transfer in the foreign area.
(c) The head of an agency shall prescribe regulations or standards
for the inclusion of any other kinds of pay authorized in statutes
other than title 5, United States Code, in a lump-sum payment. Such
regulations or standards shall be consistent with 5 U.S.C. 5551, 5552,
6306, and other applicable provisions of law.
(d) Except as provided in paragraph (c) of this section, a lump-sum
payment shall exclude any other pay not specifically listed in
paragraph (b) of this section.
(e) An employee shall not earn leave for the period covered by a
lump-sum payment.
(f) A lump-sum payment is not subject to deductions for retirement
under the Civil Service Retirement System or the Federal Employees
Retirement System established by chapters 83 and 84 of title 5, United
States Code, respectively; health benefits under the Federal Employees
Health Benefits program established by chapter 89 of title 5, United
States Code; life insurance under the Federal Employees Group Life
Insurance program established by chapter 87 of title 5, United States
Code; and savings under the Thrift Savings Plan established by
subchapter III of chapter 84 of title 5, United States Code.
(g) When a reemployed annuitant's pay is reduced in accordance with
5 CFR 831.702 of this chapter, the reemployed annuitant's lump-sum
payment at the time of his or her separation, death, or transfer under
the conditions prescribed in Sec. 550.1203 shall be computed using his
or her pay before such reduction.
(h) A lump-sum payment is subject to garnishment under parts 581
and 582 of this chapter and to administrative offset (for recovery of
debts to the Federal Government) under 4 CFR part 102.
Sec. 550.1206 Refund of lump-sum payment and recredit of annual leave.
(a) Except as provided in paragraphs (d), (e), and (f) of this
section, when an employee who receives a lump-sum payment for
accumulated and accrued annual leave under 5 U.S.C. 5551 is reemployed
in the Federal service prior to the end of the period covered by the
lump-sum payment, the employee shall refund to the employing agency an
amount equal to the pay included in the lump-sum payment under
Sec. 550.1205(b) that covers the period between the date of
reemployment and the expiration of the lump-sum period. The refund
shall be computed based on the pay used to compute the lump-sum payment
under Sec. 550.1205(b). An agency may permit an employee to refund the
lump-sum payment for annual leave in installments. If an agency permits
the lump-sum refund to be paid in installments, the employee shall pay
the lump-sum payment refund in full within 1 year after the date of
reemployment.
(b) An amount of annual leave equal to the days or hours of work
remaining between the date of reemployment and the expiration of the
lump-sum period shall be recredited to the employee when the full
refund is paid to the agency. The recredited annual leave shall be made
available for use by the employee on and after the date the annual
leave is recredited. Annual leave shall be recredited as follows:
(1) When an employee is reemployed in the Federal service in a
position covered by subchapter I of chapter 63 of title 5, United
States Code, an amount of annual leave equal to the days or hours of
work remaining between the date of reemployment and the expiration of
the lump-sum period shall be recredited to the employee by the
employing agency.
(2) When an employee is reemployed in the Federal service in a
position that is not covered by subchapter I of chapter 63 of title 5,
United States Code, but is covered by a different leave system, an
amount of annual leave representing the days or hours of work remaining
between the date of reemployment and the expiration of the lump-sum
period, as determined under Sec. 630.501(b) of this chapter, shall be
recredited to the employee by the employing agency. If the unexpired
period of leave covers a larger amount of leave than can be recredited
under a different leave system, the employee shall refund only the
amount that represents the leave that can be recredited.
(3) If any part of the lump-sum refund made under paragraph (a) of
this section reflects annual leave restored under 5 U.S.C. 6304(d), the
annual leave shall be restored in a separate account, and the time
limit for using the restored annual leave shall be the same as that
originally established under Sec. 630.306 of this chapter prior to the
employee's separation or transfer under the conditions prescribed in
Sec. 550.1203.
(c) Except as provided in paragraph (d) of this section, the annual
leave recredited under paragraph (b) of this section shall be subject
to the maximum annual leave limitation established under 5 U.S.C. 6304
(a), (b), (c), or (f), as appropriate, for the position in which
reemployed.
(d) If the annual leave recredited to an employee under paragraph
(b) of this section is in excess of the maximum annual leave limitation
established under 5 U.S.C. 6304 (a), (b), (c), or (f), as appropriate,
for the position in which reemployed, the employee's maximum annual
leave limitation shall be determined as follows:
(1) If at the time of separation or transfer an employee was
subject to a higher maximum annual leave limitation than the maximum
annual leave limitation for the position in which reemployed, a new
maximum annual leave limitation shall be established at the lesser of
the employee's former maximum annual leave limitation at the time of
separation or transfer or the amount of annual leave to be recredited
to the employee under paragraph (b) of this section. The new maximum
annual leave limitation shall be subject to reduction in the same
manner as provided in 5 U.S.C. 6304(c) until the employee's accumulated
annual leave is equal to or less than the maximum annual leave
limitation for the position in which reemployed.
(2) A member of the Senior Executive Service (SES) who had a
personal leave ceiling established under Sec. 630.301(d) of
[[Page 40482]]
this chapter and who is reemployed in a position covered by subchapter
I of chapter 63 of title 5, United States Code, shall have a new
personal leave ceiling established at the lesser of his or her personal
leave ceiling established under Sec. 630.301(d) of this chapter at the
time of separation or transfer or the amount of annual leave to be
recredited to the SES member under paragraph (b) of this section. The
new personal leave ceiling shall be subject to reduction in the same
manner as provided in 5 U.S.C. 6304(c) until the SES member's
accumulated annual leave is equal to or less than the maximum annual
leave limitation for the position in which reemployed.
(e) An employee who is reemployed in a position listed in 5 U.S.C.
6301(2) (ii), (iii), (vi), or (vii) shall not be required to refund a
lump-sum payment under paragraph (a) of this section.
(f) An employee who is reemployed in a position that has no leave
system to which annual leave can be recredited shall not be required to
refund a lump-sum payment under paragraph (a) of this section.
(g) When an employee is reemployed in a position listed in 5 U.S.C.
6301(2) (x)-(xiii), the amount of annual leave to be recredited to the
employee under paragraph (b) of this section shall remain to the
employee's credit and shall become payable when the employee becomes
eligible for a lump-sum payment under the conditions prescribed in
Sec. 550.1203. If the employee subsequently transfers to a position
covered by subchapter I of chapter 63 of title 5, United States Code,
or to a position under a different formal leave system to which his or
her annual leave can be recredited, the annual leave to the employee's
credit shall be recredited to the employee by the employing agency
under Sec. 550.1206(b)(1).
(h) An agency shall document the calculation of an employee's lump-
sum payment as provided in Sec. 550.1205(b) so as to permit the
subsequent calculation of any refund required under paragraph (a) of
this section and any recredit of annual leave required under paragraph
(b) of this section.
[FR Doc. 97-19774 Filed 7-28-97; 8:45 am]
BILLING CODE 6325-01-P
