[Material Transmitted:]{.underline}

Department of Health and Human Services (HHS) Instruction 575-1, Change
1, Recruitment, Relocation and Retention Incentives, dated December 15,
2008.

[Material Superseded:]{.underline}

This is a change to a current Instruction. Material superseded can be
found in Section 575-1-70.

[Background:]{.underline}

The current instruction for administration of Recruitment, Relocation
and Retention Incentives, HHS Instruction 575-1, was issued on March 28,
2008. A revision to these regulations was issued on January 1, 2008
which expanded the scope of this regulation to include use of retention
incentives for a current Federal employee to retain him/her in their
current position during a period of time before the closure or
relocation of the employee's office, facility, activity or organization
and the employee would be likely to leave for a different position in
the Federal service in the absence of the retention incentive.

In addition, this change to the current policy revises the reporting
requirements in Section 575-1-70 from quarterly OPDIV reporting to only
the required annual reporting to the Office of Personnel Management.

This issuance is effective immediately. Implementation under this
issuance must be carried out in accordance with applicable laws,
regulations, bargaining agreements, and Departmental policy.

Antonia T. Harris

Deputy Assistant Secretary for Human Resources

INSTRUCTION 575-1, C1

**RECRUITMENT, RELOCATION AND RETENTION INCENTIVE POLICY (3Rs)**

575-1-10 Purpose and Authority

575-1-20 Coverage and Exclusions

575-1-30 Definitions

575-1-40 Responsibilities

575-1-50 Criteria

575-1-60 Service Agreements

575-1-70 Documentation, Reporting and Monitoring

Exhibit A -- Sample Service Agreement

Exhibit B -- Recruitment, Relocation and Retention Incentives Comparison
Chart

Exhibit C - Approval Authority for Recruitment, Relocation and Retention
Incentives

**575-1-10 PURPOSE AND AUTHORITY**

A.  **Purpose**. This Instruction describes the Department's compliance
    with the Office of Personnel Management (OPM) interim regulations
    under 5 CFR 575, dated May 13, 2005, titled "Recruitment, Relocation
    and Retention (3Rs) Incentives". This regulation requires the
    Department to establish a recruitment, relocation and retention plan
    in order to continue to authorize these incentives.

**B. Authority**. This instruction is authorized by:

1.  Section 101 of the Federal Workforce Flexibility Act of 2004 (5 USC
    5753)

2.  Title 5, U.S.C. Sections 5753 and 5754;

3.  Title 5, CFR Parts 530 and 575.

**575-1-20 COVERAGE AND EXCLUSIONS**

A.  **Coverage**. The following types of employees appointed or placed
    in the following categories of positions are **eligible** to receive
    recruitment, relocation and retention incentives: General Schedule
    (GS); Senior-Level (SL); Scientific or Professional (ST); Senior
    Executive Service (SES); Law Enforcement Officer; Executive
    Schedule; prevailing rate position; or any other position in a
    category for which payment of an incentive has been approved by OPM
    at the request of the head of the employing agency.

B.  **Exclusions**. The following types of employees are **excluded**
    from receiving recruitment, relocation and retention incentives:
    Presidential appointees; noncareer appointees in the SES; those in
    positions excepted from the competitive service by reason of their
    confidential, policy-determining, policy-making or policy-advocating
    character; members of the Public Health Service Commissioned Corps;
    agency heads; or those expected to receive an appointment as an
    agency head (i.e. those appointed to other positions in anticipation
    of subsequent approval to be appointed as the agency head).

**575-1-30 DEFINITIONS**

A.  **Recruitment Incentive.** An incentive paid to a *newly-appointed*
    employee if it has been determined that the position is critical to
    the mission of the organization and is likely to be difficult to
    fill in the absence of such an incentive.

B.  **Relocation Incentive.** An incentive paid to a *current* Federal
    employee who must relocate to accept a position in a different
    geographic area if it has been determined that the position is
    critical to the mission of the organization and is likely to be
    difficult to fill in the absence of such an incentive.

> Note: While the payment of relocation "incentives" is payable only to
> current Federal employees, relocation allowances or "expenses" may be
> paid to current or newly appointed employees in accordance with
> General Services Administration, Federal Travel Regulation, Chapter
> 302, Relocation Allowances.

C.  **Retention Incentive.** An incentive paid to a *current* Federal
    employee if it has been determined that the unusually high or unique
    qualifications of the employee or a special need of the organization
    for the employee\'s services in a position critical to the mission
    of the organization makes it essential to retain the employee and
    that the employee would be likely to leave the Federal service in
    the absence of a retention incentive. An incentive is also allowable
    to retain an employee or group of employees when a general or
    specific notice of closure or relocation has been announced and they
    are essential to retain for mission requirements and are likely to
    leave for a different position in the Federal service in the absence
    of a retention incentive.

D.  **Authorized Agency Official (AAO).** All officials who have been
    delegated authority in writing to approve these incentives are
    considered AAOs for the purpose of this policy (see Exhibit C).

E.  **Rate of Basic Pay.** Rate of pay fixed by law or administrative
    action for the position to which an employee will be appointed,
    before deductions and including any special rate or locality
    payment. This does not include pay of any other kind such as night
    or environmental differentials. Incentive payments are not
    considered part of basic pay for any purpose.

F.  **Aggregate Pay Limitations:** For GS employees, payment of these
    incentives is subject to the aggregate limitation on pay in a
    calendar year, which may not exceed the rate of pay of Level I of
    the Executive Schedule. For SES, SL and ST employees, payment of
    these incentives is subject to the aggregate limitation on pay in a
    calendar year, which may not exceed the rate payable to the Vice
    President at the end of the calendar year. (Note: SES employees are
    currently limited to the aggregate limitation on pay in a calendar
    year, which may not exceed the rate of pay of Level I of the
    Executive Schedule, pending certification of the SES performance
    appraisal system by the OPM.)

G.  **Service Agreement:** A written agreement that must be signed by an
    employee prior to receiving an incentive pay that requires
    completion of a specified period of employment.

H.  **Service Period:** The period of service required by the service
    agreement, which may not be less than 6 months and may not exceed 4
    years. Service periods begin on the first day of a pay period and
    end on the last day of a pay period. (Note: A service agreement is
    not required for bi-weekly retention incentive payments.)

**575-1**-**40 RESPONSIBILITIES:** The following officials and
components will be responsible for administering this policy in
accordance with the appropriate statutes and regulations.

**A. ASAM, Office of Human Resources (OHR):** The OHR is responsible
for:

1.  Update and maintenance of this policy.

2.  Preparation and submission of periodic reports regarding usage of
    3Rs incentives as well as the annual 3R's report to the OPM.

3.  Monitoring the use of these incentives to ensure that payments are
    consistent with the requirements of this policy.

4.  Publishing specific criteria applicable to documenting position
    criticality to the organization.

**B. OPDIV and STAFFDIV:** OPDIVs and STAFFDIVs are responsible for:

1.  Providing oversight as it relates to determining whether an employee
    meets the statutory requirements for receiving a recruitment,
    relocation, or retention incentive.

2.  Ensuring that all AAOs have a written delegation of authority to
    approve an incentive.

3.  Documenting the criteria used for determining the amount of an
    incentive payment, method of payment, length of a required service
    period, or termination of a service agreement.

4.  Ensuring that this policy is applied in a consistent manner when
    determining the length of service agreements for employees in
    similar circumstances.

5.  Submitting all required documentation for authorization and payment
    of any incentive to their operating human resource organizations in
    order to assure regulatory and policy requirements are met prior to
    payment.

**C. Operating Human Resource Organizations**: Each operating human
resource organization is responsible for:

1.  Establishing and maintaining documentation and records containing
    the justification and service agreement, if applicable, for each
    issuance of an incentive payment and making such documentation
    available for review and analysis upon request by the Department or
    OPM.

2.  Ensuring compliance with regulatory and policy requirements prior to
    processing the incentive request for payment.

3.  Providing input to OHR for periodic or annual reporting requirements
    in the use of these incentives as required to maintain
    accountability.

**575-1-50 CRITERIA.** Described below are the Department's criteria for
recruitment, relocation and retention incentives as required:

**I.** **Recruitment Incentive:** A recruitment incentive may be paid to
a newly appointed employee following a determination that the employee's
position is critical to the mission of the organization and is likely to
be difficult to fill in the absence of an incentive.

A.  **General Policy**

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1.  A *newly appointed employee* is defined as an individual receiving
    their first appointment (regardless of tenure) as an employee of the
    Federal government; an appointment following a break in service of
    at least 90 days from a previous appointment; or, under certain
    circumstances, an appointment when the employee's Federal service
    during the 90 day period immediately preceding the appointment was
    limited to one or more of the following: time-limited or
    nonpermanent appointment in the competitive or excepted service;
    employment with the Washington, D.C. government on or after October
    1, 1987; appointment as an expert or consultant under 5 USC 3109 and
    5 CFR Part 304; certain nonappropriated fund employees; or a
    provisional appointment.

2.  Recruitment incentives may be approved by AAOs. However, the AAO
    must be one level above the recommending official unless there is no
    official at a higher level in the OPDIV or STAFFDIV.

3.  The employee must sign an agreement to fulfill a period of service
    with the OPDIV or STAFFDIV of not less than 6 months and not more
    than 4 years before an incentive may be paid.

4.  Payment of recruitment incentives may not be made retroactively;
    that is, prior to the effective date of the service agreement signed
    by management officials and the employee.

5.  Recruitment incentives may be paid as an initial lump-sum payment at
    the beginning of the service period, in installments throughout the
    service period, as a final lump sum payment upon completion of the
    service period, or in a combination of these methods.

6.  Recruitment incentives may be paid to an individual not yet employed
    who has received an offer of employment and signed a written service
    agreement.

7.  The determination to pay a recruitment incentive must be made before
    the prospective employee enters on duty in the position for which
    recruited.

8.  If OPM has granted direct hire authority to a group of positions
    deemed critical to the mission of the organization, it is
    automatically deemed hard to fill.

9.  The following are examples that should also be considered in
    documenting that a position is deemed hard to fill:

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a)  The success of recent efforts to recruit candidates for similar
    positions using indicators such as offer acceptance rates, the
    proportion of positions filled, and the length of time required to
    fill similar positions;

b)  Recent turnover in similar positions;

c)  Employment trends and labor-market factors that may affect the
    ability to recruit candidates for similar positions;

d)  Special or unique competencies required for the position;

e)  Efforts to use non-pay authorities, such as special training and
    work scheduling flexibilities, to resolve difficulties alone or in
    combination with a recruitment incentive;

f)  The desirability of the duties, work or organizational environment,
    or geographic location of the position;

g)  Other supporting factors.

**B. Factors in Determining the Amount of a Recruitment Incentive:**

1.  General. Recruitment incentives may not exceed 25% of the employee's
    annual rate of basic pay in effect at the beginning of the service
    period multiplied by the number of years (including fractions of a
    year) in the service period, not to exceed 4 years. For example, if
    an employee is paid 25% for 3 years, the total incentive would
    amount to 75% of their annual rate of basic pay at the beginning of
    the service period.

2.  In determining the amount of the recruitment incentive, at least
    **one or more** of the following criteria should be use in
    documenting the decision:

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a)  The current non-Federal salary or salary plus fringe benefits that
    the candidate receives.

b)  The projected cost of a renewed recruitment effort if the candidate
    does not accept the position.

c)  The urgency of the program from a public health perspective,
    including HHS strategic plan or Congressional priority in the
    program.

d)  The specialized skills that the individual possesses that will
    benefit the organization and that are in addition to the basic
    position requirements.

**II. Relocation Incentive:** A relocation incentive may be paid to a
*current* Federal employee who must relocate to accept a position that
is critical to the mission of the organization, is

in a different geographic area and that is likely to be *difficult to
fill* (see Section 575-1-50, IA9 above) in the absence of such an
incentive.

A.  **General Policy**

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1.  Relocation incentives may be approved by AAOs. However, the AAO must
    be one level above the recommending official unless there is no
    official at a higher level in the OPDIV or STAFFDIV.

2.  The determination to pay a relocation incentive must be made before
    the prospective employee enters on duty in the position for which
    relocated.

3.  An employee accepting a relocation incentive must sign an agreement
    for the period of service covered by the incentive which may not
    exceed 4 years.

4.  Payment of relocation incentives may not be made retroactively; that
    is, prior to the effective date of the service agreement signed by
    management officials and the employee.

5.  A relocation incentive may be paid only when the employee\'s rating
    of record (or other official performance appraisal or evaluation) is
    at least \"Fully Successful\" (or the equivalent level under a
    different Performance Management and Appraisal Plan) for the last
    annual rating of record.

6.  The worksite is in a different geographic location (normally defined
    as 50 miles or more from the worksite of the position held
    immediately before the move).

7.  The employee must show evidence that a residence in the new
    geographic location has been established.

8.  A relocation incentive may be offered to an employee, and paid
    simultaneously while an employee is already receiving a retention
    incentive, subject to aggregate pay limitations.

9.  Relocation incentives may be paid as an initial lump-sum payment at
    the beginning of the service period, in installments throughout the
    service period, as a final lump sum payment upon completion of the
    service period, or in a combination of these methods.

**B. Factors in Determining the Amount of a Relocation Incentive:**

1.  General. Same as Section 575-1-50, IB1 above.

2.  The disparity in cost-of-living between the candidate's current
    residence and the proposed duty station, as documented in a
    Runzheimer International Two Location Comparison, or similar type of
    cost-of-living comparison.

3.  The personal or professional disruption that will occur as a result
    of relocation and/or the undesirability of the geographic area of
    the proposed duty station.

**III. Retention Incentive:** A retention incentive may be paid to a
*current* Federal employee in a position that is critical to the mission
of the organization, if it is determined that the unusually high or
unique qualifications of the employee, or a special need of the
organization for the employee's services, make it essential to retain
the employee and that the employee would be likely to leave the Federal
service in the absence of a retention incentive. An incentive is also
allowable to retain an employee or group of employees when a general or
specific notice of closure or relocation has been issued to the
employee(s) in writing; that their position(s) would be affected by the
closure or relocation of the employee's office, facility, activity, or
organization; that they are considered essential to retain for mission
requirements; and that they are likely to leave for a different position
in the Federal service in the absence of a retention incentive.

**A. General Policy**

1.  Retention incentives may be approved by AAOs. However, the AAO must
    be one level above the recommending official unless there is no
    official at a higher level in the OPDIV or STAFFDIV.

2.  Retention incentives may not be authorized for an employee during a
    period of time already covered by a recruitment or relocation
    incentive service agreement.

3.  A retention incentive may be paid only when the employee\'s rating
    of record (or other official performance appraisal or evaluation) is
    \"Fully Successful\" (or the equivalent level under a different
    Performance Management Appraisal Plan) for the last annual rating of
    record.

4.  A retention incentive may be paid to an employee or group of
    employees when a general or specific written notice was issued that
    his or her position may be affected by the closure or relocation of
    the office, facility, activity, or organization (e.g., the
    employee's position may or will be moved to a new geographic
    location or eliminated).

5.  A written justification must be prepared by the OPDIV that clearly
    delineates the special skills possessed by the employee(s) that
    makes it essential to retain him or her for a period of time prior
    to the closure or relocation of the organization. The justification
    must also identify the length of time the individual(s) will be
    retained and the basis for the amount authorized. When a group
    incentive is considered it must be documented that there is a high
    risk that a significant number of employees in the group would
    likely leave for a different position in the Federal service.

6.  Retention incentives may be paid in installments after the
    completion of specified periods of service, or in a single lump sum
    after completion of the full period of service as required by the
    service agreement. Retention incentives *may not* be paid as a
    single lump sum at the start of a service period or in advance of
    fulfilling the service period for which the incentive is authorized.
    (Installment payments must be consistent with biweekly pay periods.)

> Note: A written service agreement is not required for retention
> incentives paid on a bi-weekly installment payment basis, but is
> required for all cases where an employee is likely to leave the
> department for a different position in the Federal service. When no
> service agreement is required, payment of retention incentives may be
> reduced or terminated if that payment is no longer warranted due to
> changes in labor-market factors, organizational need for employee
> services, budgetary considerations, or other factors.

7.  Payment of retention incentives may not be made retroactively; that
    is, prior to the effective date of the service agreement signed by
    management officials and the employee.

8.  Excess retention incentive payments that would cause an employee's
    total compensation to exceed the applicable aggregate limitation may
    be deferred and paid in lump sum payment at the beginning of the
    following year.

**B. Factors in Determining the Amount of a Retention Incentive:**

1.  General. Retention incentive rates for individuals are expressed as
    a percentage of the employee's annual rate of basic pay, not to
    exceed 25% of the annual rate of basic pay.

2.  Retention incentive rates for a group or category are expressed as a
    percentage, not to exceed 10% of the basic pay of each employee in a
    group or category of employees authorized to receive an incentive.

3.  A competing written non-Federal salary offer (normally not more than
    90 days old) may be considered as documentation in determining the
    amount of an incentive. However, letters of inquiry of availability
    for a position (e.g., headhunter letters) are not considered to be
    employment offers but are part of the search for available
    candidates.

4.  The role of the individual in the program, e.g., leadership, expert,
    etc., and the potential impact of the individual leaving the
    program. Factors to be reviewed include:

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a)  The urgency of the program from a public health perspective,
    including the organization's mission or Congressional priority in
    the program.

b)  The unusually high or unique qualifications, specialized skills, or
    training and experience that the individual possesses, including a
    cost assessment of previous government-sponsored training, if
    pertinent.

c)  Other comparable criteria that must be justified in the case.

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5.  Other considerations. Although the following factors may also be
    considered in establishing the amount of the incentive, no
    individual factor provides sufficient basis alone to justify the
    amount of the incentive.

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a)  The average salary reported in published salary surveys for
    comparable private sector positions, if available.

b)  The length of service and contribution of the employee while serving
    in the agency.

c)  The estimated cost of recruitment and training associated with
    replacement of the employee, if he/she were to leave the Federal
    service.

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6.  Whenever a retention incentive is based on the likelihood that an
    employee, who is eligible for retirement, is likely to retire if the
    incentive is not paid, the organization is required to document that
    recruitment and/or succession planning is underway for the position
    and the position is critical to the mission of the organization.

**IV. Group Incentives**. Recruitment, relocation and retention
incentives may be paid to groups of employees, as follows:

1.  AAOs may target groups of similar positions that have been difficult
    to fill in the past or that are likely to be difficult to fill in
    the future and may make the required determination to offer a
    recruitment incentive on a group basis.

2.  A major organization unit of HHS is relocated to a different
    commuting area (i.e. 50 or more miles from the current work site, or
    less than 50 miles with approval of a waiver) and the approving
    official determines that relocation incentives 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 mission and/or without undue disruption
    of service to the public.

3.  AAOs may pay retention incentives to an eligible group or category
    of employees if the organization determines that the unusually high
    or unique qualifications of the group or a special need of the
    organization for the employees' services makes it essential to
    retain the employees and that there is high risk that a significant
    number of employees in the group would likely leave the Federal
    service or leave for a different positions in the Federal service in
    the absence of a retention incentive. An incentive is also allowable
    to retain a group of employees whose skills are essential to mission
    requirements during the closure or termination of organizational
    operations if they are likely to leave for a different position in
    the Federal service in the absence of a retention incentive.

**V. Movement between HHS Components.** If an employee voluntarily moves
between components, the gaining component shall reimburse the component
that paid the incentive on a pro rata basis.

**575-1- 60 SERVICE AGREEMENTS**: Before paying recruitment, relocation
or retention incentives (and when required), an employee must sign a
written Service Agreement that includes the following:

**A.** **Contents of Service Agreement**:

1.  A specified period of employment with the organization (or successor
    organization in the event of a transfer of function);

2.  The length of the service period and criteria for making that
    determination;

3.  Commencement and termination dates of the required service period.
    (**Note:** An organization may delay a service agreement
    commencement date for recruitment and relocation incentives until
    after the employee completes an initial period of formal training or
    required probationary period.);

4.  Specify that if an employee does not successfully complete the
    training or probationary period before the service period commences
    for recruitment and relocation incentives, the organization is not
    obligated to pay any portion of these incentives to the employee;

5.  Specify the total amount of the incentive, the method of paying the
    incentive, and the timing and amounts of each installment incentive
    payment;

6.  Specify the discretionary and mandatory conditions under which the
    organization may or must terminate the service agreement; the
    obligations of the HHS component and employee if the agreement is
    terminated, including the effect on incentives paid for completed or
    uncompleted service; or not yet paid for uncompleted service.

7.  The service agreement may include any other terms or conditions
    that, if violated, will result in termination of the service
    agreement.

**B.** **Minimum Length of Time for Service Agreements**: The following
criteria must be used for all **non-biweekly payment** amounts when
determining the length of service, and percentage of the annual rate of
basic pay for all recruitment, relocation or retention incentives with
signed written service agreements (see Sample Service Agreement at
Exhibit B).

[Amount of Payment]{.underline} [Length of Service
Agreement]{.underline}

Up to 16% 6 months

16% to 25% 1 year

26% to 50% 2 year

51% to 75% 3 year

76% to 100% 4 year

**C. Termination of Service Agreement**: Service agreements may be
terminated by the AAO based on discretionary or mandatory reasons.

1.  Discretionary termination. An AAO *may* unilaterally terminate
    recruitment, relocation, or retention incentive service agreements
    based on the management needs of the office. Examples of reasons for
    discretionary termination include reduction in force, insufficient
    funds, or need to reassign the employee to a position with different
    terms of employment.

> a\) For recruitment and relocation incentives, the employee is
> entitled to the incentive payments that are attributable to completed
> service and to retain any portion of an incentive payment the employee
> received that is attributable to uncompleted service
>
> b\) For retention incentives, the employee is entitled to retain any
> retention incentive payments that are attributable to completed
> service and to receive any portion of a retention incentive payment
> owed by the organization for completed service.

2.  Mandatory termination. An AAO *must* terminate a service agreement
    if an employee is demoted or separated for cause (i.e. for
    unacceptable performance or conduct), if the employee receives a
    rating of record lower than "Fully Successful" (or equivalent)
    during the period of the service agreement; or if the employee
    otherwise fails to fulfill the terms of the service agreement. An
    AAO must also terminate a retention incentive agreement when
    conditions change such that the original determination to pay the
    incentive no longer applies (e.g. the employee is assigned to a
    different position that is not within the terms of the agreement;
    the closure or relocation is cancelled or the employee subsequently
    accepts the offer to transfer with the organization). *Note: If an
    employee moves to a different position also subject to relocation or
    closure, a new retention incentive for the employee, may be
    appropriate.*

> a\) For recruitment and relocation incentives, the employee will
> retain any incentive payments that are attributable to completed
> service; must repay any portion attributable to uncompleted service
> (see #5 below); and the organization is not obligated to pay any
> outstanding incentive payments attributable to uncompleted service
> unless specified in the service agreement.
>
> b\) For retention incentives, the employee will retain any incentive
> payments that are attributable to completed service or is entitled to
> receive any payments owed attributable to completed service; and the
> organization is not obligated to pay any outstanding incentive
> payments attributable to uncompleted service unless specified in the
> service agreement.

3.  The termination of a service agreement is not grievable or
    appealable.

4\. The organization must notify an employee in writing when it
terminates a service agreement.

5.  If an employee must reimburse the Federal Government for any
    incentive payments received that are attributable to incomplete
    service, and the employee fails to reimburse the organization for
    the excess amount owed, the Department will take steps to recover
    amounts owed pursuant to the regulations governing the Department of
    Health and Human Services debt collection procedures.

**D.** **Use of Other Discretionary Compensation Options**: Whenever
incentives are used in conjunction with other forms of discretionary
compensation (e.g., superior qualifications appointment, student loan
repayment, etc.), the incentive request must address the total
compensation proposed for the candidate and describe the rationale for
use of multiple pay mechanisms.

**575-1-70** **DOCUMENTATION, REPORTING AND MONITORING**

A.  **Documentation.** Each organization approving a determination to
    pay an incentive shall document its decision in sufficient detail to
    justify the payment and to reconstruct the action. This
    documentation will be submitted to the servicing human resource
    organization for review for sufficiency, adherence to this policy,
    and retention in the appropriate file. This documentation shall
    include a copy of the service agreement, the initial incentive
    determination, the employee's rating for the previous performance
    period, and the following information:

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1.  The criteria used to determine the need for paying the incentive
    (including the need for advance determination) and how the criteria
    were applied.

2.  The criteria used to determine the amount of the incentive and how
    the criteria were applied.

3.  The qualifications of the candidate/employee in sufficient detail to
    demonstrate that he/she meets any special qualifications needed for
    the position.

4.  The agency (i.e., executive, judicial, or legislative branch) to
    which the employee would be likely to transfer to in the absence of
    the retention incentive.

5.  The length of the service agreement and the criteria used to make
    that determination.

6.  Upon approval, payment of the incentive shall be documented by
    preparing an SF-50 and filing it in the employee's Official
    Personnel Folder.

**B. Reporting.** The OHR will prepare an annual report in accordance
with Office of Personnel Management requirements. Each report shall
include:

1.  The type of incentive;

2.  Title, pay plan, series, and grade;

3.  Total number of employees paid that incentive by title, pay plan,
    series, and grade;

4.  Total dollar amount paid for that incentive by title, pay plan,
    series, and grade;

5.  A narrative discussion of the situations for which incentives were
    used, the effectiveness of the retention incentive authorities, and
    any recommendations for improving the use of the statutory
    authorities in terms of both regulatory change and Department
    requirements and flexibilities.

**C. Monitoring**. Each OPDIV or STAFFDIV must monitor the use of these
incentives to ensure their use is consistent with the requirements of
the regulations and this policy. If an OPDIV or STAFFDIV is not adhering
to these requirements, its use may be revoked or suspended, or its
delegation authority withdrawn.

**Exhibit A: Sample Service Agreement**

+-------------------------------+--------------------------------------+
| **[Employee                   | **[Date]{.smallcaps}**:              |
| Name]{.smallcaps}**:          | [     ]{.underline}                  |
| [     ]{.underline}           |                                      |
+-------------------------------+--------------------------------------+
| **[Required Service           | **[Commencement Date of Service      |
| Period]{.smallcaps}**:        | Period]{.smallcaps}**:               |
|                               |                                      |
| [     ]{.underline} Years     | [     ]{.underline}                  |
| [     ]{.underline} Months    |                                      |
|                               |                                      |
| Minimum allowed: 6 months     |                                      |
|                               |                                      |
| Maximum allowed: 4 years      |                                      |
+-------------------------------+--------------------------------------+
|                               | **[Termination Date of Service       |
|                               | Period]{.smallcaps}**:               |
|                               |                                      |
|                               | [     ]{.underline}                  |
+-------------------------------+--------------------------------------+
| **[Probationary or Training   | **[Payment of                        |
| Period Required before        | Incentive:]{.smallcaps}**            |
| payment?]{.smallcaps}**       |                                      |
|                               | **[Amount]{.smallcaps}:** \$         |
| **Yes** **No**                | [     ]{.underline}                  |
|                               | **[Percentage]{.smallcaps}**:        |
|                               | [     ]{.underline}                  |
+-------------------------------+--------------------------------------+
|                               | **[Method of Payment]{.smallcaps}:** |
|                               |                                      |
|                               | Lump Sum                             |
|                               |                                      |
|                               | Installments by Pay Period:          |
|                               |                                      |
|                               | Installments by Service Period (If   |
|                               | yes, Describe): [     ]{.underline}  |
|                               |                                      |
|                               | Combination of Above Options (If     |
|                               | yes, Describe): [     ]{.underline}  |
+-------------------------------+--------------------------------------+
| **[Conditions for Termination | **[Conditions under which employee   |
| of Service                    | must repay incentive:                |
| Agreement:]{.smallcaps}**     | (Describe)]{.smallcaps}**            |
|                               |                                      |
| Demotion or Separation for    | **     **                            |
| Cause:                        |                                      |
|                               |                                      |
| Rating of Record less than    |                                      |
| Fully Successful:             |                                      |
|                               |                                      |
| Failure to Fulfill Terms of   |                                      |
| Service Agreement:            |                                      |
|                               |                                      |
| The conditions under which    |                                      |
| the agreement was established |                                      |
| no longer exist (e.g.,        |                                      |
| relocation or closure has     |                                      |
| been cancelled; the employee  |                                      |
| moves to position not         |                                      |
| authorized for an incentive   |                                      |
| or labor market factors,      |                                      |
| etc.):                        |                                      |
+-------------------------------+--------------------------------------+
| **[Conditions under which     | **[Conditions under which            |
| organization may terminate    | organization will pay an additional  |
| the Service Agreement for     | incentive payment for partially      |
| failure to complete the       | completed service if Service         |
| Service Period:               | Agreement is terminated:             |
| (Describe)]{.smallcaps}**     | (Describe)]{.smallcaps}**            |
|                               |                                      |
| **     **                     | **     **                            |
+-------------------------------+--------------------------------------+
| **[Other Terms or Conditions  | **[Criteria for Repayment of an      |
| Resulting in the Termination  | Incentive for Failure to Complete    |
| of the Service Agreement:     | the Specified Length of Service (See |
| (Describe)]{.smallcaps}**     | Section 575.1-60 (C))]{.smallcaps}** |
|                               |                                      |
| **     **                     | **     **                            |
+-------------------------------+--------------------------------------+

**EXHIBIT B**

**Recruitment, Relocation and Retention Incentives Comparison Chart**

+-------+---------+---------+--------+----------+-------+-----------+
| *     | **PA    | **      | **FOR  | **CR     | **SE  | **HOW     |
| *INCE | YMENT** | COVERED | WHOM** | ITERIA** | RVICE | PAID**    |
| NTIVE |         | POSI    |        |          | A     |           |
| T     |         | TIONS** |        |          | GREEM |           |
| YPE** |         |         |        |          | ENT** |           |
+-------+---------+---------+--------+----------+-------+-----------+
| **R   | May not | GS;     | Newly  | D        | Req   | -   Lump  |
| ECRUI | exceed  | Senior  | app    | ifficult | uired |     sum   |
| TMENT | 25% of  | Level;  | ointed | to fill  | not   |     at    |
| I     | the     | Sci     | F      | in the   | less  |           |
| NCENT | annual  | entific | ederal | absence  | than  | beginning |
| IVE** | rate of | and     | empl   | of an    | 6     |     of    |
|       | basic   | Profes  | oyees, | in       | m     |           |
|       | pay     | sional; | inc    | centive. | onths |   service |
|       | (which  | Career  | luding | Must     | and   |           |
|       | i       | SES;    | first  | consider | no    |    period |
|       | ncludes | Law     | per    | the      | l     |     or    |
|       | a       | Enfo    | manent | fo       | onger |           |
|       | special | rcement | appoin | llowing: | than  | -   Final |
|       | rate,   | Officer | tment; |          | 4     |     lump  |
|       | l       | pos     | or     | -   Di   | years |     sum   |
|       | ocality | itions; | appoi  | fficulty |       |           |
|       | p       | EX; or  | ntment |     in   |       |   payment |
|       | ayment, | a       | of a   |     re   |       |     upon  |
|       | or      | po      | former | cruiting |       |     c     |
|       | similar | sitions | em     |     ca   |       | ompletion |
|       | pay     | where   | ployee | ndidates |       |     of    |
|       | under   | the     | after  |          |       |           |
|       | other   | rate of | a 90   | -        |       |   service |
|       | legal   | pay is  | day    |  Success |       |           |
|       | aut     | fixed   | break  |     of   |       |    period |
|       | hority) | by law  | in     |          |       |     or    |
|       | of the  | at a    | s      |   recent |       |           |
|       | e       | rate    | ervice |          |       | -   Ins   |
|       | mployee | equal   |        |  efforts |       | tallments |
|       | at the  | to a    |        |     to   |       |     or    |
|       | be      | rate    |        |          |       |           |
|       | ginning | for the |        |  recruit |       | -   Any   |
|       | of the  | Ex      |        |     ca   |       |     co    |
|       | service | ecutive |        | ndidates |       | mbination |
|       | period  | Sc      |        |     for  |       |     of    |
|       | mul     | hedule; |        |          |       |     these |
|       | tiplied | pre     |        |  similar |       |           |
|       | by the  | vailing |        |     p    |       |           |
|       | number  | rate    |        | ositions |       |           |
|       | of      | pos     |        |          |       |           |
|       | years   | itions; |        | -   Non  |       |           |
|       | (in     | po      |        | -Federal |       |           |
|       | cluding | sitions |        |          |       |           |
|       | fr      | in a    |        | salaries |       |           |
|       | actions | c       |        |     for  |       |           |
|       | of a    | ategory |        |          |       |           |
|       | year)   | for     |        |  similar |       |           |
|       | in the  | which   |        |     p    |       |           |
|       | service | payment |        | ositions |       |           |
|       | period  | of a    |        |          |       |           |
|       | not-to  | recr    |        | -        |       |           |
|       | -exceed | uitment |        |   Recent |       |           |
|       | 4 years | or      |        |          |       |           |
|       |         | rel     |        | turnover |       |           |
|       |         | ocation |        |          |       |           |
|       |         | in      |        | -        |       |           |
|       |         | centive |        |    Labor |       |           |
|       |         | has     |        |          |       |           |
|       |         | been    |        |   market |       |           |
|       |         | a       |        |          |       |           |
|       |         | pproved |        |  factors |       |           |
|       |         | by OPM  |        |          |       |           |
|       |         |         |        | -        |       |           |
|       |         |         |        |  Special |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |   skills |       |           |
|       |         |         |        | /qualifi |       |           |
|       |         |         |        | cations, |       |           |
|       |         |         |        |     etc. |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        | -   A    |       |           |
|       |         |         |        | vailable |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |   hiring |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |    flexi |       |           |
|       |         |         |        | bilities |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        | -   Work |       |           |
|       |         |         |        |     env  |       |           |
|       |         |         |        | ironment |       |           |
|       |         |         |        |     or   |       |           |
|       |         |         |        |     ge   |       |           |
|       |         |         |        | ographic |       |           |
|       |         |         |        |     l    |       |           |
|       |         |         |        | ocation, |       |           |
|       |         |         |        |     etc. |       |           |
+-------+---------+---------+--------+----------+-------+-----------+
| **    | Same as | Same as | C      | Same as  | Same  | Same as   |
| RELOC | above   | above   | urrent | above    | as    | above     |
| ATION |         |         | F      |          | above |           |
| I     |         |         | ederal | \*       |       |           |
| NCENT |         |         | emp    | Re       |       |           |
| IVE** |         |         | loyees | location |       |           |
|       |         |         |        | i        |       |           |
|       |         |         |        | ncentive |       |           |
|       |         |         |        | cannot   |       |           |
|       |         |         |        | be paid  |       |           |
|       |         |         |        | until    |       |           |
|       |         |         |        | the      |       |           |
|       |         |         |        | employee |       |           |
|       |         |         |        | est      |       |           |
|       |         |         |        | ablished |       |           |
|       |         |         |        | a        |       |           |
|       |         |         |        | r        |       |           |
|       |         |         |        | esidence |       |           |
|       |         |         |        | in the   |       |           |
|       |         |         |        | new      |       |           |
|       |         |         |        | c        |       |           |
|       |         |         |        | ommuting |       |           |
|       |         |         |        | area     |       |           |
+-------+---------+---------+--------+----------+-------+-----------+
| *     | Per     | Same as | C      | -   U    | Same  | In        |
| *RETE | centage | above   | urrent | nusually | as    | stallment |
| NTION | of      |         | F      |     high | above | after     |
| I     | basic   |         | ederal |     or   | e     | c         |
| NCENT | pay,    |         | emp    |          | xcept | ompletion |
| IVE** | not to  |         | loyees |   unique | not   | of        |
|       | exceed  |         |        |          | req   | specific  |
|       | 25% for |         |        |   qualif | uired | periods   |
|       | an      |         |        | ications | if    | of        |
|       | ind     |         |        |          | paid  | service,  |
|       | ividual |         |        | -        | in    | or single |
|       | e       |         |        |  Special | biw   | lump sum  |
|       | mployee |         |        |     need | eekly | after     |
|       | or 10%  |         |        |     of   | in    | c         |
|       | for a   |         |        |          | stall | ompletion |
|       | group   |         |        |    organ | ments | of full   |
|       | or      |         |        | ization; |       | period of |
|       | c       |         |        |          |       | service   |
|       | ategory |         |        | employee |       | per the   |
|       | of      |         |        |          |       | service   |
|       | em      |         |        |    would |       | agreement |
|       | ployees |         |        |          |       |           |
|       |         |         |        |    leave |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |  Federal |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        | service; |       |           |
|       |         |         |        |     or   |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |    leave |       |           |
|       |         |         |        |     for  |       |           |
|       |         |         |        |     a    |       |           |
|       |         |         |        |     d    |       |           |
|       |         |         |        | ifferent |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        | position |       |           |
|       |         |         |        |     in   |       |           |
|       |         |         |        |     the  |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |  Federal |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |  service |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |   during |       |           |
|       |         |         |        |     an   |       |           |
|       |         |         |        |     a    |       |           |
|       |         |         |        | nnounced |       |           |
|       |         |         |        |          |       |           |
|       |         |         |        |  closure |       |           |
|       |         |         |        |     or   |       |           |
|       |         |         |        |     re   |       |           |
|       |         |         |        | location |       |           |
|       |         |         |        |     .    |       |           |
+-------+---------+---------+--------+----------+-------+-----------+

**EXHIBIT C**

**Summary of Approval Authority for Recruitment, Relocation, and
Retention Incentives**

+-----------------------+-----------------------+-----------------------+
| **Authority**         | **\*Approved By**     | **Limitations**       |
+-----------------------+-----------------------+-----------------------+
| 1\. Approve requests  | OPDIV Heads           | One level above       |
| for recruitment or    |                       | recommending official |
| relocation incentives | STAFFDIV Heads        | (except when          |
| for individuals or    |                       | recommending official |
| groups when the       | IG                    | is the OPDIV Head,    |
| proposed incentive    |                       | STAFFDIV Head or the  |
| does not exceed 25%   | AAO                   | IG)                   |
| multiplied by the     |                       |                       |
| number of years in    |                       |                       |
| the service period.   |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 2\. Approve requests  | OPDIV Heads STAFFDIV  | One level above       |
| for retention         | Heads                 | recommending official |
| incentives when the   |                       | (except when          |
| proposed incentive    | IG                    | recommending official |
| does not exceed 25%   |                       | is the OPDIV Head,    |
| for an individual or  | AAO                   | STAFFDIV Head or the  |
| 10% for a member of a |                       | IG)                   |
| group.                |                       |                       |
+-----------------------+-----------------------+-----------------------+
| 3\. Terminate service | OPDIV Heads STAFFDIV  | One level above       |
| agreements and        | Heads                 | recommending official |
| incentives payments.  |                       |                       |
|                       | IG                    | (except when          |
|                       |                       | recommending official |
|                       | AAO                   | is the OPDIV Head,    |
|                       |                       | STAFFDIV Head or the  |
|                       |                       | IG)                   |
+-----------------------+-----------------------+-----------------------+
| 4\. Request waiver    | ASAM                  |                       |
| from OPM to exceed    |                       |                       |
| recruitment,          |                       |                       |
| relocation or         |                       |                       |
| retention incentive   |                       |                       |
| limitations.          |                       |                       |
+-----------------------+-----------------------+-----------------------+

\*Note: All approving officials must be at the SES or equivalent level
i.e. Senior Title 42, Commissioned Corps Flag Officers, and Senior
Biomedical Research Service.