| Description |
An agency may pay a retention
allowance of up to 25 percent of basic pay to an
employee if the unusually high or unique
qualifications of the employee or a
special need of the agency for the employee's
services makes it essential to retain the
employee, and the agency determines that
the employee would be likely to leave the Federal
service without the allowance.
|
| Position Coverage
|
Retention allowances may be paid
to current Federal employees holding a General
Schedule (GS) position or another type of
position for which such payments have been
approved by the Office of Personnel Management
(OPM). By regulation, OPM has approved coverage
of certain positions, including prevailing rate (wage),
senior-level and
scientific or professional (SL/ST), Senior
Executive Service (SES), and Executive Schedule
positions (except agency heads). OPM approves
other categories upon written request from the
head of the employing agency.
|
| Agency Plan |
Before paying a retention
allowance, an agency must establish a plan that
designates the officials with authority to review
and approve payment of allowances. The plan must
include criteria to be met or considered in
authorizing allowances (including the amount of
an allowance), procedures for paying allowances,
and documentation and recordkeeping requirements.
|
| Approval Criteria |
Before paying a retention
allowance, an agency must determine that-
- the unusually high or unique
qualifications of the employee or a
special need for the employee's services
makes it essential to retain the
employee; and
- the employee would be likely to leave the
Federal service (for any purpose) in
absence of the allowance.
The agency must document the basis for this
determination in writing. It must address the
extent to which the employee's departure would
affect the agency's ability to carry out an
activity or perform a function that is essential
to the agency's mission. It should also address
the success of recent efforts to recruit
candidates with similar qualifications and the
availability of candidates in the labor market,
as applicable.
|
| Groups of Employees |
An agency may pay a retention
allowance of up to 10 percent of basic pay (or up
to 25 percent with OPM approval) to a group or
category of employees. (See the
Group Retention Allowances fact sheet for
additional information.)
|
| Payment |
A retention allowance must be
calculated as a percentage of the employee's rate
of basic pay (excluding any locality payment),
not to exceed 25 percent. It is paid at the same
time as the employee's regular paycheck (usually
biweekly). An agency may not begin paying a
retention allowance during the service period
established by the employee's recruitment or
relocation bonus service agreement. However, a
relocation bonus may be paid to an employee
already receiving a retention allowance.
|
| Annual Review |
Agencies must review each
retention allowance authorization at least
annually to determine whether payment is still
warranted.
|
| Reduction or Termination
of a Retention Allowance |
An agency may continue payment
of a retention allowance as long as the
conditions giving rise to the original
determination to pay the allowance still exist.
An agency may reduce or terminate an allowance
if, for example, a lesser amount would be
sufficient to retain the employee, the agency no
longer needs the employee's services, or for
budget considerations.
|
| Basic Pay |
A retention allowance is not
considered part of an employee's rate of basic
pay for any purpose.
|
| Aggregate Pay Limitation
|
An agency may not authorize or
continue a retention allowance if the allowance
would cause the employee's projected aggregate
compensation in a calendar year to exceed the
rate for level I of the Executive Schedule. An
agency must reduce or terminate a retention
allowance before deferring any other type of
payment under the deferral provision in the
aggregate pay limitation regulations. See 5 CFR
part 530, subpart B, for additional information.
|
| References |
5 U.S.C. 5754
5 CFR part 575, subpart C
|
