[Federal Register Volume 88, Number 219 (Wednesday, November 15, 2023)]
[Proposed Rules]
[Pages 78243-78249]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-25199]


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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. 88, No. 219 / Wednesday, November 15, 2023 / 
Proposed Rules

[[Page 78243]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 575

[Docket ID: OPM-2023-0027]
RIN 3206-AO36


Recruitment and Relocation Incentive Waivers

AGENCY: Office of Personnel Management.

ACTION: Proposed rule.

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SUMMARY: The Office of Personnel Management (OPM) is issuing a proposed 
rule to expand the authority to approve waivers of the normal payment 
limitations on recruitment and relocation incentives. An expansion of 
the waiver approval authority would provide agencies with access to 
higher payment limitations for these flexibilities without requesting 
approval from OPM. Under this proposed rule, agencies would have the 
authority to approve a recruitment or relocation incentive of up to 50 
percent of an employee's annual rate of basic pay multiplied by the 
number of years in a service agreement (not to exceed 100 percent of 
annual basic pay) based on a critical agency need. In addition, this 
proposed rule would give agencies flexibility to set the length of the 
required service period for recruitment incentives to a period less 
than 6 months but not more than 4 years, which would align the service 
requirements for recruitment incentives with those for relocation 
incentives and provide agencies with additional flexibility in taking 
advantage of this incentive as a recruitment tool.

DATES: Comments must be received on or before January 16, 2024.

ADDRESSES: You may submit comments, identified by the Regulation 
Identifier Number (RIN) number ``3206-AO36'' and title, using the 
following method:
    <bullet> Federal Rulemaking Portal: https://www.regulations.gov. 
Follow the instructions for submitting comments.
    The general policy for comments and other submissions from members 
of the public is to make these submissions available for public viewing 
at https://www.regulations.gov as they are received without change, 
including any personal identifiers or contact information.

FOR FURTHER INFORMATION CONTACT: Gene Holson by telephone at (202) 606-
2858 or by email at <a href="/cdn-cgi/l/email-protection#5424352d79383135223179243b383d372d143b24397a333b22"><span class="__cf_email__" data-cfemail="0b7b6a7226676e6a7d6e267b64676268724b647b66256c647d">[email protected]</span></a>.

SUPPLEMENTARY INFORMATION:

Background

    Section 101 of the Federal Workforce Flexibility Act of 2004 (Act) 
(Pub. L. 108-411, October 30, 2004) amended 5 U.S.C. 5753 and 5754 by 
providing enhanced authorities to pay recruitment, relocation, and 
retention incentives. Congress originally provided the authority to pay 
such incentives under the Federal Employees Pay Comparability Act of 
1990 (Pub. L. 101-509, November 5, 1990). In the 2004 Act, Congress 
expanded the circumstances under which these flexibilities may be paid 
and enabled agencies to make the payments in more ways to enhance their 
desired effect in assisting Federal agencies' efforts to recruit and 
retain the kind of workforce needed in the 21st century. OPM's 
regulations at 5 CFR part 575, subparts A, B, and C, implement these 
authorities. This rulemaking proposes changes to the recruitment 
incentive regulations at 5 CFR part 575, subpart A, and relocation 
incentive regulations at 5 CFR part 575, subpart B, to provide agencies 
additional payment options. To differentiate these kinds of payments--
which are designed to provide a monetary incentive for an individual to 
accept a new position, as opposed to rewarding an individual for 
quality of performance (the typical context in which the term ``bonus'' 
is used)--OPM's regulations use the term ``incentive'' in place of the 
term ``bonus,'' which is used in the statute.

Recruitment Incentives

    Under 5 U.S.C. 5753 and 5 CFR part 575, subpart A, an agency may 
pay a recruitment incentive to an employee newly appointed to a General 
Schedule or other covered position in the Federal service when the 
agency determines the position is likely to be difficult to fill in the 
absence of an incentive. The employee must sign an agreement to fulfill 
a period of service with the agency. A recruitment incentive may not 
exceed 25 percent 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). Currently, this cap may be increased to up to 50 
percent with OPM approval, based on a critical agency need, as long as 
the total incentive does not exceed 100 percent of the employee's 
annual rate of basic pay. A recruitment incentive 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. (See 5 CFR 575.109.)
    Before paying a recruitment incentive, an agency must establish a 
recruitment incentive plan. (See 5 CFR 575.107(a).) The plan must 
include the designation of officials with authority to review and 
approve the payment of recruitment incentives, the designation of 
officials with authority to waive the repayment of a recruitment 
incentive, the categories of employees who may not receive recruitment 
incentives, the required documentation for determining that a position 
is likely to be difficult to fill, requirements for determining the 
amount of a recruitment incentive, the payment methods that may be 
authorized, requirements governing service agreements (including 
criteria for determining the length of a service period, the conditions 
for terminating a service agreement, and the obligations of the agency 
and the employee if a service agreement is terminated), and 
documentation and recordkeeping requirements. Unless the head of the 
agency determines otherwise, an agency recruitment incentive plan must 
apply uniformly across the agency. (See 5 CFR 575.107(c).)
    For each determination to pay a recruitment incentive, an agency 
must document, in writing, the basis for determining that the position 
is likely to be difficult to fill in the absence of a recruitment 
incentive, the amount and timing of the incentive payments, and the 
length of the service period. The determination to pay a recruitment 
incentive must be made before the prospective employee enters on duty 
in

[[Page 78244]]

the position for which they are recruited. The authorized agency 
official must review and approve the recruitment incentive 
determination before the agency pays the incentive to the employee. 
(See 5 CFR 575.107(b), 575.108.) Payment of a recruitment incentive is 
subject to the aggregate limitation on pay under 5 CFR part 530, 
subpart B. (See 5 CFR 575.109(f).)
    An agency may determine that a position is likely to be difficult 
to fill if the agency is likely to have difficulty recruiting 
candidates with the competencies (i.e., knowledge, skills, abilities, 
behaviors, and other characteristics) required for the position (or 
group of positions) in the absence of a recruitment incentive based on 
a consideration of the factors listed in 5 CFR 575.106(b). An agency 
also may determine that a position is likely to be difficult to fill if 
OPM has approved the use of a direct-hire authority applicable to the 
position. (See 5 CFR 575.106(c).) The use of recruitment incentives can 
help agencies expand applicant pools to include more diverse 
candidates.
    Before receiving a recruitment incentive, an employee must sign a 
written agreement to complete a specified period of employment with the 
agency of not less than 6 months. The service agreement must specify 
the length, commencement date, and termination date of the service 
period; the total amount of the incentive; the method, timing, and 
amounts of incentive payments; the conditions under which an agreement 
will be terminated by the agency; any agency or employee obligations if 
a service agreement is terminated (including the conditions under which 
the employee must repay an incentive or under which the agency must 
make additional payments for partially completed service); and any 
other terms and conditions for receiving and retaining a recruitment 
incentive. (See 5 CFR 575.110.) OPM has provided a fact sheet with 
additional information on recruitment incentives.\1\
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    \1\ Office of Personnel Management. ``Fact Sheet: Recruitment 
Incentives.'' https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/recruitment-incentives/.
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Relocation Incentives

    Under 5 U.S.C. 5753 and 5 CFR part 575, subpart B, an agency may 
pay a relocation incentive to a current employee who must relocate to 
accept a General Schedule or other covered position in a different 
geographic area (permanently or temporarily) if the agency determines 
that the position is likely be difficult to fill in the absence of an 
incentive. (See 5 CFR 575.205(a).) A relocation incentive may be paid 
only when the employee's rating of record under an official performance 
appraisal or evaluation system is at least ``Fully Successful'' or 
equivalent. (See 5 CFR 575.205(c).) Like a recruitment incentive, a 
relocation incentive may not exceed 25 percent 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). With OPM approval, this cap 
may be raised to up to 50 percent (based on a critical agency need), as 
long as the total incentive does not exceed 100 percent of the 
employee's annual rate of basic pay at the beginning of the service 
period. The incentive 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. (See 5 CFR 575.209.)
    Before paying a relocation incentive, an agency must establish a 
relocation incentive plan. A relocation incentive plan must generally 
address the same information required in a recruitment incentive plan, 
as described above. (See 5 CFR 575.207.)
    For each relocation incentive authorized, an agency must document 
in writing the justification for approving the incentive that addresses 
factors similar to those needed for recruitment incentive 
authorizations, as described above. The agency must also document that 
the worksite of the new position is in a different geographic area than 
the previous position. The determination to pay a relocation incentive 
must be made before the employee enters on duty in the position at the 
new duty station. The authorized agency official must review and 
approve the relocation incentive determination before the agency pays 
the incentive to the employee. (See 5 CFR 575.207(b), 575.208.) Agency 
determinations to pay a relocation incentive must generally be made on 
a case-by-case basis. (See 5 CFR 575.208.) Payment of a relocation 
incentive is subject to the aggregate limitation on pay under 5 CFR 
part 530, subpart B. (See 5 CFR 575.209(e).)
    The factors an agency may consider in determining that the new 
position is likely to be difficult to fill in the absence of a 
relocation incentive are also similar to those that may be considered 
for recruitment incentives. (See 5 CFR 575.206(b).) The use of 
relocation incentives can help agencies expand applicant pools to 
include more diverse candidates. Before receiving a relocation 
incentive, an employee must sign a written agreement to complete a 
specified period of employment with the agency at the new duty station 
(not to exceed 4 years). The relocation incentive service agreement 
requirements and payment termination provisions are consistent with 
those required for recruitment incentives, except there is no minimum 
service period required. (See 5 CFR 575.210 and 575.211.) OPM has 
provided a fact sheet with additional information on relocation 
incentives.\2\
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    \2\ Office of Personnel Management. ``Fact Sheet: Relocation 
Incentives.'' https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/relocation-incentives/.
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Recruitment and Relocation Incentive Waivers

    Agencies currently have the authority to approve a recruitment or 
relocation incentive without OPM approval for payments of up to 25 
percent of an employee's annual rate of basic pay times the number of 
years in a service agreement (not to exceed 4 years or 100 percent of 
annual basic pay). However, OPM approval is required when an agency 
would like to exceed this payment limit to make larger payments over 
shorter service agreement lengths. Under a recruitment or relocation 
incentive waiver, agencies can approve a recruitment or relocation 
incentive of up to 50 percent of an employee's annual rate of basic pay 
times the number of years in a service agreement (not to exceed 100 
percent of annual basic pay). (See 5 CFR 575.109(c) and 575.209(c).)
    For example, an OPM waiver is not required for an agency to pay a 
recruitment or relocation incentive of up to 25 percent of annual basic 
pay for a 1-year service agreement, 50 percent of basic pay for a 2-
year service agreement, or 100 percent of basic pay for a 4-year 
service agreement. An OPM waiver currently is required for an agency to 
pay a recruitment or relocation incentive of 50 percent of annual basic 
pay for a 1-year service agreement or 100 percent of annual basic pay 
for a 2-year service agreement. OPM has provided a fact sheet on 
calculating maximum recruitment and relocation incentives for service 
periods of various lengths.\3\
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    \3\ Office of Personnel Management. ``Fact Sheet: Calculating 
Maximum Recruitment and Relocation Incentives for Service Periods of 
Various Lengths.'' https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/calculating-maximum-recruitment-and-relocation-incentives-for-service-periods-of-various-lengths/.

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[[Page 78245]]

    A waiver request must include a description of the critical agency 
need the proposed recruitment or relocation incentive would address. 
The authorized agency official must determine that the competencies 
required for the position(s) are critical to the successful 
accomplishment of an important agency mission, project, or initiative 
(e.g., programs or projects related to a national emergency or 
implementing a new law or critical management initiative). To assist 
agencies in developing waiver requests, OPM has provided waiver request 
templates for recruitment incentives \4\ and relocation incentives.\5\
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    \4\ Office of Personnel Management. ``Recruitment Incentive 
Waiver Template.'' https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/recruitment-incentive-waiver-template.pdf.
    \5\ Office of Personnel Management. ``Relocation Incentive 
Waiver Template.'' https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/relocation-incentive-waiver-template.pdf.
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    The law, 5 U.S.C. 5754, does not permit the expansion of the waiver 
authority for retention incentives found at 5 CFR part 575, subpart C. 
Therefore, retention incentives are not included in this proposed rule.

Proposed Changes to Recruitment Incentive Rules

    In 5 CFR part 575, subpart A, OPM is proposing to amend the current 
regulations as follows:
    <bullet> Revise 5 CFR 575.106(a)(4) to provide an authorized agency 
official with sole and exclusive discretion, subject only to OPM review 
and oversight, to waive the limitation on the maximum amount of a 
recruitment incentive under 5 CFR 575.109(c).
    <bullet> Require agencies at proposed 5 CFR 575.107(a) to designate 
the officials with authority to waive the recruitment incentive payment 
limitation in their recruitment incentive plans.
    <bullet> Amend the incentive approval level provisions in 5 CFR 
575.107(b)(1) to state that if a determination to pay a recruitment 
incentive includes a waiver of the payment limitation under 5 CFR 
575.109(c), the official who is designated in the agency's plan under 5 
CFR 575.107(a) must approve the determination.
    <bullet> Revise 5 CFR 575.107(b)(2) to state that when necessary to 
make a timely offer of employment, an authorized agency official may 
authorize an official who is not lower than a candidate's supervisor to 
offer a recruitment incentive to a candidate without further review or 
approval in any amount within a pre-established range up to the normal 
payment limitation in 5 CFR 575.109(b) or a higher cap if the agency 
has approved a waiver to the normal payment limitation under 5 CFR 
575.109(c).
    <bullet> Amend 5 CFR 575.109(c)(1) to provide the conditions under 
which an authorized agency official would be able to waive the payment 
limitation in 5 CFR 575.109(b) for an employee or group of employees 
based on a critical agency need.
    <bullet> Require in proposed 5 CFR 575.109(c)(2) that waiver 
determinations be made in writing.
    <bullet> Delete 5 CFR 575.109(c)(2)(iii)-(v) to eliminate 
redundancy because those requirements are covered by 5 CFR 
575.109(c)(2)(ii).
    <bullet> Amend 5 CFR 575.110(a) to remove the minimum 6-month 
required service period for recruitment incentives. Under the proposed 
rule, a recruitment incentive service agreement could be any length up 
to 4 years, consistent with the current allowable service agreement 
lengths for relocation incentives. For example, this would allow an 
agency to determine that a summer internship position is likely to be 
difficult to fill and authorize a recruitment incentive for an intern 
with a 3-month service agreement.

Proposed Changes to Relocation Incentive Rules

    In 5 CFR part 575, subpart B, OPM is proposing to amend the current 
regulations as follows:
    <bullet> Revise 5 CFR 575.206(a)(4) to provide an authorized agency 
official with sole and exclusive discretion, subject only to OPM review 
and oversight, to waive the limitation on the maximum amount of a 
relocation incentive under 5 CFR 575.209(c).
    <bullet> Require agencies at proposed 5 CFR 575.207(a) to designate 
the officials with authority to waive the relocation incentive payment 
limitation in their relocation incentive plans.
    <bullet> Amend 5 CFR 575.207(b)(1) to state that if a determination 
to pay a relocation incentive includes a waiver of the payment 
limitation under 5 CFR 575.209(c), the official who is designated in 
the agency's plan under 5 CFR 575.207(a) must approve the 
determination.
    <bullet> Revise 5 CFR 575.209(c)(1) to provide the conditions under 
which an authorized agency official may waive the payment limitation in 
5 CFR 575.209(b) for an individual or group of employees based on a 
critical agency need.
    <bullet> Require in proposed 5 CFR 575.209(c)(2) that waiver 
determinations be made in writing.
    <bullet> Delete 5 CFR 575.209(c)(2)(iii)-(v) to eliminate 
redundancy because those requirements are covered by 5 CFR 
575.209(c)(2)(ii).

Other Changes

    OPM is proposing to revise several sections to use gender neutral 
language. These changes are contained at 5 CFR 575.102, 5 CFR 
575.110(f), 5 CFR 575.111(e), 5 CFR 575.111(f), 5 CFR 575.210(f), 5 CFR 
575.211(e), and 5 CFR 575.211(f).

Expected Impact of This Proposed Rule

A. Statement of Need

    OPM serves as the chief human resources agency and personnel policy 
manager for the Federal Government. OPM provides human resources 
leadership and support to Federal agencies and helps the Federal 
workforce achieve their goals as they serve the American people. OPM 
oversees merit-based and inclusive hiring into the civil service, 
directs human resources and employee management services, administers 
retirement benefits, manages health insurance and insurance programs, 
and manages personnel vetting policies and processes.
    As noted in OPM's FY 2022-2026 Strategic Plan,\6\ ``We will promote 
a diverse, equitable, inclusive, and accessible Federal workforce based 
on merit; develop a strategic vision for the Federal Government to 
prepare for the future of work; support Federal agencies to attract 
early career talent; and equip current and future Federal workers with 
the ability to build new skills over time to adapt to a rapidly 
changing world.''
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    \6\ Office of Personnel Management. ``Strategic Plan Fiscal 
Years 2022-2026.'' https://www.opm.gov/about-us/strategic-plan/03454-fy2022-2026-strategicplan-lookbook-508pdf.pdf.
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    In its March 2021 report,\7\ the National Academy of Public 
Administration (NAPA) recommended that OPM adopt a more decentralized 
and risk-based approach to executing its transactional approval and 
oversight responsibilities. Specifically, NAPA recommended that OPM 
delegate, to the maximum extent possible, decision-making authorities 
to agencies, and conduct cyclical reviews to verify that appropriate 
actions were taken. NAPA's Rec. 2.5 was incorporated into OPM's 
Strategic Plan as Objective 4.2, which reads as follows: ``Increase 
focus on Governmentwide policy work by

[[Page 78246]]

shifting more low-risk delegations of authorities to agencies.'' 
Further, Objective 4.6 is to streamline Federal human capital 
regulations and guidance to reduce administrative burden and promote 
innovation while upholding merit system principles.
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    \7\ National Academy of Public Administration. ``Elevating Human 
Capital: Reframing the U.S. Office of Personnel Management's 
Leadership Imperative'' https://www.volckeralliance.org/sites/default/files/attachments/OPM-Final-Report-National-Academy-of-Public-Administration.pdf.
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    Permitting agencies to review and approve payment limit waivers at 
the agency level will reduce administrative burden on agencies and 
increase the efficiency of using recruitment and relocation incentives. 
This will allow agencies to move more quickly in hiring new employees 
and relocating those who are moving into positions that are likely to 
be difficult to fill. Such efficiency could be especially helpful in 
emergency or other critical situations in which recruiting new 
employees or relocating current employees rapidly is necessary. Also, 
with increases in the number of retirement-eligible employees, 
recruiting early career and experienced talent to the Federal workforce 
is a high priority. Using recruitment incentives can be a useful tool 
in achieving this goal.

B. Impact

    It is important to understand that waivers to the normal payment 
limitations do not alter the maximum total amount of a recruitment or 
relocation incentives that may be paid to an individual employee. 
Agencies have the authority to approve a recruitment or relocation 
incentive for payments of up to 25 percent of an employee's annual rate 
of basic pay times the number of years in a service agreement, not to 
exceed 4 years or 100 percent of annual basic pay. With a waiver, 
agencies can approve a recruitment or relocation incentive of up to 50 
percent of an employee's annual rate of basic pay times the number of 
years in a service agreement, but still not to exceed 100 percent of 
annual basic pay. Therefore, the total incentive paid under a waiver 
continues to be limited to 100 percent of the employee's annual basic 
pay, but the incentive may be paid over 2 years rather than 4 years.
    Section 101(a) of the Federal Workforce Flexibility Act of 2004 
(Pub. L. 108-411, October 30, 2004) established significantly enhanced 
recruitment, relocation, and retention incentive authorities that 
provided Federal agencies with the flexibility to use such incentives 
in more strategic ways to help the Federal Government improve its 
competitiveness in recruiting and maintaining a high quality workforce. 
The enhancements provided by the Act included the authority to waive 
the normal cap on recruitment and relocation incentives because of a 
critical agency need and provided authority to pay higher amounts over 
shorter periods of time (not to exceed a total of 100 percent of the 
employee's starting salary). The implementing regulations \8\ required 
OPM approval to waive the recruitment and relocation incentive limits.
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    \8\ 70 FR 25732, May 13, 2005.
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    Although this waiver authority was effective upon publication of 
the implementing regulations on May 13, 2005, OPM did not receive any 
agency requests for recruitment or relocation waivers until 2008. Since 
that time, OPM has approved 15 recruitment incentive waivers for 6 
agencies and 11 relocation incentive waivers for 4 agencies. OPM has 
approved waivers for healthcare, cybersecurity, and other mission-
critical occupations. OPM-approved waivers provide agencies the 
discretionary authority to use a higher recruitment or relocation 
incentive payment limit for the covered position(s) and employee(s). An 
agency with an OPM-approved incentive waiver is responsible for 
documenting in writing the justification for paying each incentive 
authorized for an employee under the waiver and obtaining approval from 
the appropriate authorized agency official.
    OPM does not know how agencies would use the additional flexibility 
provided by this proposed change. It is possible that agencies would 
approve more recruitment and relocation incentive waivers if they are 
not required to go through the process of submitting a waiver request 
to OPM. However, the criteria for approval will not be changing, so 
agencies will still need to determine that the situation meets the 
critical need and other requirements for approving a waiver. In other 
words, approval of a waiver is not automatic and agencies will need to 
use discretion in granting waiver requests. In addition, agencies will 
need to make determinations about whether they have funds available in 
their budgets to provide waivers. The use of discretionary pay 
flexibilities such as recruitment and relocation incentives may be 
limited by agency budgets.
    As with the waiver authority, OPM does not know how agencies would 
use the additional flexibility of utilizing recruitment incentive 
service agreements of less than 6 months. Agencies do not report data 
to OPM on the length of the service agreements they authorize. Since 
the amount of the maximum recruitment incentive is based on the length 
of the service period, an agency would be limited in how much of an 
incentive they could authorize. For example, under the normal payment 
limitations, the maximum recruitment incentive that could be paid for a 
3-month service period is 6.25 percent (.25 (25 percent) x .25 (3 
months or \1/4\ of 1 year) = 6.25 percent) of the employee's annual 
rate of basic pay at the beginning of the service period. Under a 
waiver, the maximum recruitment incentive that could be paid for a 3-
month service period is 12.5 percent (.50 (50 percent) x .25 (3 months 
or \1/4\ of 1 year) = 12.5 percent) of the employee's annual rate of 
basic pay at the beginning of the service period.

C. Regulatory Alternatives

    An alternative to this proposed rule is to continue to require 
agencies to request approval from OPM when they seek waiver of the 
normal recruitment and relocation payment limitations. OPM would 
continue to review agency requests and grant waivers if the regulatory 
criteria are met. However, this slows down the approval process for 
agencies that have a critical need to recruit or relocate employees and 
need to act quickly.
    Another alternative would be to expand the authority to waive the 
normal recruitment and relocation payment limitations, but require 
higher approval levels within the agency. OPM believes agencies are in 
the best position to decide at what level to delegate this authority 
within their agency.
    Also, OPM could expand the agency waiver authority, but require 
additional approval criteria. Agencies may include additional approval 
criteria in their agency plan. OPM doesn't believe it is necessary to 
require agencies to use additional approval criteria.
    Finally, OPM could expand the agency waiver authority, but 
institute special reporting requirements for the use of the new waiver 
authority. Agencies are required to report to OPM's central data system 
when they authorize a waiver of the normal recruitment or relocation 
incentive payment limitations using legal authority code VPO. OPM 
doesn't believe additional reporting requirements are necessary.
    Regarding the amendment of the service agreement requirement for 
recruitment incentives, possible alternatives include maintaining the 
current 6-month minimum service agreement or reducing it to a lesser 
amount (e.g., 3 months). OPM believes agencies are in the best position 
to decide the appropriate length for a recruitment incentive service 
agreement.

[[Page 78247]]

D. Costs

    This proposed rule would affect the operations of more than 80 
Federal agencies--ranging from cabinet-level departments to small 
independent agencies--that have employees covered by the recruitment 
and relocation incentive regulations. OPM estimates that this rule 
would require individuals employed by these agencies to spend time 
updating agency policies and procedures as a result of the proposed 
regulations. For this cost analysis, the assumed average salary rate of 
Federal employees performing this work will be the rate in 2023 for GS-
14, step 5, from the Washington, DC, locality pay table ($150,016 
annual locality rate and $71.88 hourly locality rate). OPM assumes the 
total dollar value of labor, which includes wages, benefits, and 
overhead, is equal to 200 percent of the wage rate, resulting in an 
assumed labor cost of $143.76 per hour.
    To comply with the regulatory changes in the proposed rule, 
affected agencies would need to review the rule and update their 
policies and procedures. OPM estimates that, in the first year 
following publication of a final rule, this would require an average of 
160 hours of work by employees with an average hourly cost of $143.76 
per hour. This would result in estimated costs in that first year of 
implementation of about $23,000 per agency, and about $2.7 million 
Governmentwide. There are costs associated with administering 
recruitment and relocation incentives, but not necessarily an increase 
in administrative costs for agencies that are already using these pay 
flexibilities.

E. Benefits

    Permitting agencies to review and approve waivers at the agency 
level will reduce administrative burden on agencies and increase the 
efficiency of using recruitment and relocation incentives. This will 
allow agencies to move more quickly in approving incentives when hiring 
new employees and relocating those who are moving into positions that 
are likely to be difficult to fill. Such efficiency could be especially 
helpful in emergency or other urgent situations in which recruiting new 
employees or relocating current employees rapidly is necessary. Also, 
with increases in the number of retirement-eligible employees, 
recruiting early career and experienced talent to the Federal workforce 
is a high priority. Providing agencies with more flexibility in 
implementing recruitment incentives by permitting greater latitude in 
determining service agreement lengths and payment limits can be a 
useful tool in achieving this goal.

F. Request for Comments

    OPM requests comments on the implementation and impacts of this 
proposed rule. Such information will be useful for better understanding 
the effect of these regulations on recruitment and relocation 
incentives. The type of information in which OPM is interested 
includes, but is not limited to, the following:
    <bullet> Are there additional ways that the Federal Government can 
be a model employer with respect to recruitment and relocation 
incentives?
    <bullet> How can the Federal Government use recruitment and 
relocation incentives more effectively and efficiently?
    <bullet> OPM has provided a fact sheet addressing oversight and 
accountability for these incentives.\9\ Are there any additional ways 
in which the Federal Government can provide better oversight and 
accountability of recruitment and relocation incentives?
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    \9\ Office of Personnel Management. ``Fact Sheet: Oversight and 
Accountability.'' https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/oversight-and-accountability/.
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E.O. 12866, 13563, 14094, Regulatory Review

    OPM has examined the impact of this rule as required by Executive 
Order 12866 and Executive Order 13563, and Executive Order 14094, which 
direct agencies to assess all costs and benefits of available 
regulatory alternatives and, if regulation is necessary, to select 
regulatory approaches that maximize net benefits (including potential 
economic, environmental, public, health, and safety effects, 
distributive impacts, and equity). A regulatory impact analysis must be 
prepared for major rules with economically significant effects of $200 
million or more in any one year. While this proposed rule does not 
reach the economic effect of $200 million or more, OMB has designated 
this rule as a ``significant regulatory action'' under Executive Order 
14094.

Regulatory Flexibility Act

    The Director of OPM certifies that this proposed rule will not have 
a significant economic impact on a substantial number of small entities 
because they will apply only to Federal agencies and employees.

E.O. 13132, Federalism

    This proposed rule will not have substantial direct effects on the 
States, on the relationship between the National Government and the 
States, or on distribution of power and responsibilities among the 
various levels of government. Therefore, in accordance with Executive 
Order 13132, it is determined that this proposed rule does not have 
sufficient federalism implications to warrant preparation of a 
Federalism Assessment.

E.O. 12988, Civil Justice Reform

    This proposed rule meets the applicable standards set forth in 
section 3(a) and (b)(2) of Executive Order 12988.

Unfunded Mandates Reform Act of 1995

    This proposed rule will not result in the expenditure by State, 
local or tribal governments, in the aggregate, or by the private 
sector, of more than $100 million annually. Thus, no written assessment 
of unfunded mandates is required.

Paperwork Reduction Act of 1995 (44 U.S.C. Chapter 35)

    This regulatory action will not impose any reporting or 
recordkeeping requirements under the Paperwork Reduction Act.

List of Subjects in Title 5 CFR Part 575

    Government employees, Wages.

Office of Personnel Management.
Kayyonne Marston,
Federal Register Liaison.

    Accordingly, OPM is proposing to amend 5 CFR part 575 as follows:

PART 575--RECRUITMENT, RELOCATION, AND RETENTION INCENTIVES; 
SUPERVISORY DIFFERENTIALS; AND EXTENDED ASSIGNMENT INCENTIVES

0
1. The authority citation for part 575 continues to read as follows:

    Authority:  5 U.S.C. 1104(a)(2) and 5307; subparts A and B also 
issued under 5 U.S.C. 5753; subpart C also issued under 5 U.S.C. 
5754; subpart D also issued under 5 U.S.C. 5755; subpart E also 
issued under 5 U.S.C. 5757 and sec. 207 of Public Law 107-273, 116 
Stat. 1780.

Subpart A--Recruitment Incentives

0
2. In Sec.  575.102, revise paragraph (3) of the definition ``Newly 
appointed'' to read as follows:


Sec.  575.102  Definitions.

* * * * *
    Newly appointed * * *
    (3) An appointment of an individual in the Federal Government when 
the individual's service in the Federal Government during the 90-day 
period

[[Page 78248]]

immediately preceding the appointment was not in a position excluded by 
Sec.  575.104 and was limited to one or more of the following:
* * * * *
0
3. In Sec.  575.106, revise paragraph (a)(4) to read as follows:


Sec.  575.106  Authorizing a recruitment incentive.

    (a) * * *
    (4) Waive the limitation on the maximum amount of a recruitment 
incentive under Sec.  575.109(c); and
* * * * *
0
4. In Sec.  575.107, revise paragraphs (a)(1) and (b) to read as 
follows:


Sec.  575.107  Agency recruitment incentive plan and approval levels.

    (a) * * *
    (1) The designation of officials with authority to--
    (i) Review and approve payment of recruitment incentives (subject 
to paragraph (b) of this section), including the circumstances under 
which an official has the authority to approve payment without higher-
level approval under paragraph (b)(2) of this section;
    (ii) Waive the recruitment incentive payment limitation under Sec.  
575.109(c) (subject to the approval requirements in paragraph (b) of 
this section); and
    (iii) Waive the repayment of a recruitment incentive under Sec.  
575.111(h);
* * * * *
    (b) (1) Except as provided in paragraph (b)(2) of this section, an 
authorized agency official who is at least one level higher than the 
employee's supervisor must review and approve each determination to pay 
a recruitment incentive to a newly appointed employee, unless there is 
no official at a higher level in the agency. If a determination 
includes a waiver of the payment limitation in Sec.  575.109(c), the 
official who is designated in the agency's plan under Sec.  575.107(a) 
to approve waivers must approve the determination. The authorized 
agency official must review and approve the recruitment incentive 
determination before the agency may pay the incentive to the employee.
    (2) When necessary to make a timely offer of employment, an 
authorized agency official may establish criteria in advance for 
offering recruitment incentives to newly-appointed employees and may 
authorize an official who is not lower than a candidate's supervisor to 
use these criteria to offer a recruitment incentive to a candidate 
without further review or approval in any amount within a pre-
established range up to--
    (i) The normal payment limitation in Sec.  575.109(b); or
    (ii) A higher cap if the agency has approved a waiver to the normal 
payment limitation under Sec.  575.109(c).
* * * * *
0
5. In Sec.  575.109, revise paragraph (c) to read as follows:


Sec.  575.109  Payment of recruitment incentives.

* * * * *
    (c) (1) An authorized agency official may waive the limitation in 
paragraph (b)(1) of this section for an employee or group of employees 
based on a critical agency need. The authorized agency official must 
determine that the competencies required for the position(s) are 
critical to the successful accomplishment of an important agency 
mission, project, or initiative (e.g., programs or projects related to 
a national emergency or implementing a new law or critical management 
initiative). Under such a waiver, the total amount of recruitment 
incentive payments paid to an employee in a service period may not 
exceed 50 percent of the employee's annual rate of basic pay at the 
beginning of the service period multiplied by the number of years 
(including fractions of a year) in the service period. However, in no 
event may a waiver provide total recruitment incentive payments 
exceeding 100 percent of the employee's annual rate of basic pay at the 
beginning of the service period.
    (2) Waiver determinations must be made in writing and include--
    (i) A description of the critical agency need the recruitment 
incentive would address;
    (ii) The documentation required by Sec.  575.108; and
    (iii) Any other information pertinent to the case at hand.
* * * * *
0
6. In Sec.  575.110, revise paragraphs (a) and (f) to read as follows:


Sec.  575.110  Service agreement requirements.

    (a) Before paying a recruitment incentive, an agency must require 
the employee to sign a written service agreement to complete a 
specified period of employment with the agency (or successor agency in 
the event of a transfer of function). An authorized agency official 
must establish the criteria for determining the length of a service 
period. The service period may not exceed 4 years.
* * * * *
    (f) The service agreement may include any other terms or conditions 
that, if violated, will result in termination of the service agreement 
under Sec.  575.111(b). For example, the service agreement may specify 
the employee's work schedule, type of position, and the duties the 
employee is expected to perform. In addition, the service agreement may 
address the extent to which periods of time on detail, in a nonpay 
status, or in a paid leave status are creditable towards the completion 
of the service period.
0
7. In Sec.  575.111, revise paragraphs (e) and (f) to read as follows:


Sec.  575.111  Termination of a service agreement.

* * * * *
    (e) If an authorized agency official terminates a service agreement 
under paragraph (a) of this section, the employee is entitled to all 
recruitment incentive payments that are attributable to completed 
service and to retain any portion of a recruitment incentive payment 
the employee received that is attributable to uncompleted service.
    (f) Except as provided in paragraph (j) of this section, if an 
authorized agency official terminates a service agreement under 
paragraph (b) of this section, the employee is entitled to retain 
recruitment incentive payments previously paid by the agency that are 
attributable to the completed portion of the service period. If the 
employee received recruitment incentive payments that are less than the 
amount that would be attributable to the completed portion of the 
service period, the agency is not obligated to pay the employee the 
amount attributable to completed service, unless the agency agreed to 
such payment under the terms of the recruitment incentive service 
agreement. If the employee received recruitment incentive payments in 
excess of the amount that would be attributable to the completed 
portion of the service period, the employee must repay the excess 
amount, except when an authorized agency official waives the 
requirement to repay the excess amount under paragraph (h) of this 
section.
* * * * *

Subpart B--Relocation Incentives

0
8. In Sec.  575.206, revise paragraph (a)(4) to read as follows:


Sec.  575.206  Authorizing a relocation incentive.

    (a) * * *
    (4) Waive the limitation on the maximum amount of a relocation 
incentive under Sec.  575.209(c); and
* * * * *
0
9. In Sec.  575.207, revise paragraphs (a)(1) and (b)(1) to read as 
follows:

[[Page 78249]]

Sec.  575.207  Agency relocation incentive plan and approval levels.

    (a) * * *
    (1) The designation of officials with authority to--
    (i) Review and approve payment of relocation incentives (subject to 
paragraph (b) of this section);
    (ii) Waive the relocation incentive payment limitation under Sec.  
575.209(c) (subject to the approval requirements in paragraph (b) of 
this section); and
    (iii) Waive the repayment of a relocation incentive under Sec.  
575.211(h);
* * * * *
    (b) (1) Except as provided in paragraph (b)(2) of this section, an 
authorized agency official who is at least one level higher than the 
employee's supervisor must review and approve each determination to pay 
a relocation incentive, unless there is no official at a higher level 
in the agency. If a determination includes a waiver of the payment 
limitation in Sec.  575.209(c), the official who is designated in the 
agency's plan under Sec.  575.207(a) to approve waivers must approve 
the determination. The authorized agency official must review and 
approve the relocation incentive determination before the agency pays 
the incentive to the employee.
* * * * *
0
10. In Sec.  575.209, revise paragraph (c) to read as follows:


Sec.  575.209  Payment of relocation incentives.

* * * * *
    (c) (1) An authorized agency official may waive the limitation in 
paragraph (b)(1) of this section for an employee (or group of 
employees, if the case-by-case determination is waived under the 
conditions in Sec.  575.208(b)) based on a critical agency need. The 
authorized agency official must determine that the competencies 
required for the position are critical to the successful accomplishment 
of an important agency mission, project, or initiative (e.g., programs 
or projects related to a national emergency or implementing a new law 
or critical management initiative). Under such a waiver, the total 
amount of relocation incentive payments paid to an employee in a 
service period may not exceed 50 percent of the annual rate of basic 
pay of the employee at the beginning of the service period multiplied 
by the number of years (including fractions of a year) in the service 
period. However, in no event may a waiver provide total relocation 
incentive payments exceeding 100 percent of the employee's annual rate 
of basic pay at the beginning of the service period.
    (2) Waiver determinations must be in writing and include--
    (i) A description of the critical agency need the relocation 
incentive would address;
    (ii) The documentation required by Sec.  575.208;
    and
    (iii) Any other information pertinent to the case at hand.
* * * * *
0
11. In Sec.  575.210, revise paragraph (f) to read as follows:


Sec.  575.210  Service agreement requirements.

* * * * *
    (f) The service agreement may include any other terms or conditions 
that, if violated, will result in termination of the service agreement. 
For example, the service agreement may specify the employee's work 
schedule, type of position, and the duties the employee is expected to 
perform. In addition, the service agreement may address the extent to 
which periods of time on detail, in a nonpay status, or in a paid leave 
status are creditable towards the completion of the service period.
0
12. In Sec.  575.211, revise paragraphs (e) and (f) to read as follows:


Sec.  575.211  Termination of a service agreement.

* * * * *
    (e) If an authorized agency official terminates a service agreement 
under paragraph (a) of this section, the employee is entitled to all 
relocation incentive payments attributable to completed service and to 
retain any portion of a relocation incentive payment the employee 
received that is attributable to uncompleted service.
    (f) If an authorized agency official terminates a service agreement 
under paragraph (b) of this section, the employee is entitled to retain 
relocation incentive payments previously paid by the agency that are 
attributable to the completed portion of the service period. If the 
employee received relocation incentive payments that are less than the 
amount that would be attributable to the completed portion of the 
service period, the agency is not obligated to pay the employee the 
amount attributable to completed service, unless the agency agreed to 
such payment under the terms of the relocation incentive service 
agreement. If the employee received relocation incentive payments in 
excess of the amount that would be attributable to the completed 
portion of the service period, the employee must repay the excess 
amount, except when an authorized agency official waives the 
requirement to repay the excess amount under paragraph (h) of this 
section.
* * * * *
[FR Doc. 2023-25199 Filed 11-14-23; 8:45 am]
BILLING CODE 6325-39-P


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