# Presentation: 744407

## Effective Compensation Alternatives:

***Recruitment Bonuses***
***Relocation Bonuses***
***Retention Allowances***
***“******The 3Rs”***
***Strategic Compensation Conference 2000***
*August 28, 2000*

## The 3Rs

***Authorized by the Federal Employees Pay Comparability Act of 1990 (FEPCA)***
***Discretionary authorities designed to help alleviate employee recruitment and retention problems***

## Recruitment Bonuses (5 U.S.C. 5753 and 5 CFR part 575, subpart A)

***Lump-sum bonus for a newly appointed employee or former employee with a 90-day break-in-service.***
***Used for positions that would otherwise be difficult to fill.***
***Up to 25 percent of basic pay.***
***May be paid to GS, SES, SL/ST and others.***

## Recruitment Bonuses

***Employees must fulfill a service agreement of at least 6 months with repayment penalties if agreement not fulfilled.***
***May be used in combination with superior qualifications appointments, special salary rates, and advances in pay.***
***May be paid prior to the employee entering on duty.***

## Recruitment Bonuses

***Approved on a case-by-case basis. May be targeted to groups of employees in certain circumstances.***
***Paid in accordance with the agency’s recruitment bonus plan.***
***Second level review required (unless agency plan allows exceptions, e.g., job fairs).***
***Subject to the aggregate pay limit (level I of Executive Schedule).***

## Relocation Bonuses(5 U.S.C. 5753 and 5 CFR part 575, subpart B)

***Lump-sum bonus for current employees who must relocate to accept a position in a different commuting area.***
***Position must be otherwise difficult to fill***
***Up to 25 percent of basic pay. ***
***May be paid to GS, SES, SL/ST, and others.***

## Relocation Bonuses

- ***Employee must fulfill a service agreement (of any length) with repayment penalties if agreement not fulfilled.***
- ***May be paid for temporary or permanent duty station changes.***
- ***Employee must establish a residence in the new commuting area prior to payment.***
***Subject to the aggregate pay limit (level I of the Executive Schedule).***

## Relocation Bonuses

- ***Approved on a case-by-case basis.  May be approved for groups of employees subject to a mobility agreement or in a major organizational unit that is being relocated. (Employee must have a fully successful rating.)***
- ***Second level review required.***
- ***Paid in accordance with the agency’s relocation bonus plan.***

## Retention Allowances(5 U.S.C. 5754 and 5 CFR part 575, subpart C)

***Continuing payments (i.e., biweekly) to an employee--***
***with unusually high or unique qualifications***
***OR***
***when the agency has a special need for the employee’s services that makes it essential to retain the employee,***
***IF***
***the employee would be likely to leave the Federal service in the absence of an allowance.***

## Retention Allowances

***Up to 25 percent of basic pay.***
***May be paid to GS, SES, SL/ST, and others.***
***Employees must be likely to leave the Federal service (for any reason, including retirement).***
***May be paid to employees receiving a special salary rate.***
***Paid in accordance with the agency’s retention allowance plan.***

## Retention Allowances

***Must be reviewed and recertified annually.***
***Flexible—may be terminated if conditions no longer warrant payment.***
***Cannot be paid if employee is fulfilling a previously authorized recruitment or relocation bonus service agreement.***
***Subject to the aggregate pay limit (level I of the Executive Schedule).***

## Group Retention Allowances

***Authorized by regulation in June 1998.***
***Allows agencies to authorize retention allowances for a group or category of employees.***
***Used to provide a retention incentive for Y2K employees.***
***May be applied to any group—not just IT.***

## Group Retention Allowances

***Same criteria as individual retention allowances ***_***except***_***--Agencies do not have to determine whether each individual employee in the group is likely to leave.***
***Must be reasonable for the agency to presume that there is a high risk that a significant number of employees in the defined group would be likely to leave the Federal service in the absence of an allowance.***

## Group Retention Allowances

***Up to 10 percent of basic pay or up to 25 percent with OPM approval.***
***May not be used for SES, SL/ST, and similar “executive” employees.***
***A high risk that a significant number of employees in the group are likely to leave may be based on extreme labor market conditions, high private sector demand, significant pay disparities, etc.***

## Group Retention Allowances

***Group should be narrowly defined.***
***All other regulatory conditions apply.***
***Agency retention allowance program may use combination of group and individual retention allowance authority.***
***Example—State Department IT employees.***

## 3Rs—The Future

***Regulatory Changes--***
***Coverage of FWS employees***
***Retention allowances for employees likely to leave for other Federal employment in certain limited situations.***

## 3Rs—The Future

***Under Consideration--***
***Flexible payment provisions.***
***Payments in excess of 25 percent in certain situations.***
***Other flexibilities.***

## For More Information:

***OPM’s web site at www.opm.gov/oca***
***	******-******	******Factsheets***
***	******-******	******Frequently Asked Questions***
***OPM’s Pay and Leave Admin. Div.***
***	******-******	******(202) 606-2858***
***	******-******	******payleave@opm.gov***