Office of Personnel Management

Retirement and Insurance Group

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Benefits Administration Letter

Number: 96-702 Date: January 22, 1996 

SUBJECT Pay and Benefits for Employees Affected by

the Lapse in Appropriations

The purpose of this BAL is to transmit copies of two memoranda for directors of personnel that

provided guidance on pay and benefits for employees affected by the lapse in appropriations.

Mary M. Sugar, Chief

Attachments
January 6, 1996

MEMORANDUM FOR DIRECTORS OF PERSONNEL (CPM 96-1)

FROM: ALLAN D. HEUERMAN

 ASSOCIATE DIRECTOR

 FOR HUMAN RESOURCES SYSTEMS

SUBJECT: Pay and Benefits for Employees Affected by 

 the Lapse in Appropriations

Congress has passed and the President has signed legislation authorizing the immediate return

to duty in a pay status of all Federal civilian employees who have been affected by the lapse

in appropriations that began on December 16, 1995. In addition, the legislation provides

compensation for both excepted and furloughed employees retroactively from December 16,

1995, until the date of enactment (January 6, 1996).

The following guidance has been prepared by the Office of Personnel Management in

consultation with the Office of Management and Budget. It is intended to assist

affected agencies in administering pay and benefits for affected employees. As used

below, the term “excepted employees” refers to employees who are excepted from a

furlough because they are performing functions related to national security, protection

of life or property, or the orderly suspension of agency operations.

1. Pay

All employees returning to work are deemed by this legislation to be “excepted

employees” and are deemed to have returned to work at “the first regularly scheduled

opportunity after December 15, 1995"--i.e., at the beginning of the next regularly

scheduled tour of duty for each individual employee. From that time until January 6,

1996, all affected employees will be compensated as though they had performed work

for the agency during all periods of regularly scheduled duty. Therefore--

Employees are entitled to receive their rate of basic pay for all periods of

time during which they would have been in a pay status but for the lapse in

appropriations;

In the case of a within-grade increase that was delayed because of time in a

non-pay status for which the employee will now be compensated, the
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within-grade increase must be made effective on the date it was originally

due (assuming all statutory and regulatory requirements for within-grade

advancement have been satisfied);

Employees who were regularly scheduled to perform overtime work or to

perform work at night or during a period for which any other form of

premium pay would otherwise be payable on a regular basis are entitled to

receive overtime pay, night pay, or other premium pay as if the work had

been performed; 

Allowances, differentials, and other payments otherwise payable on a

regular basis must be paid as if the employee actually continued to work;

and

All periods of time from December 16, 1995, until January 6, 1996, during

which employees would, but for the lapse in appropriations, have been in a

pay status (including regularly scheduled overtime hours and periods of

standby duty) must be considered “hours of work” for pay administration

purposes under the Fair Labor Standards Act.

2. Excused Absences and Leave

Except as provided below, absences from December 16, 1995, until

January 6, 1996, must be recorded as excused absences and may not be

charged to any form of paid leave (i.e., annual leave, sick leave, or other

paid leave), compensatory time off, or credit hours under a flexible work

schedule.

In the case of employees who were on approved leave without pay

(LWOP) during the lapse in appropriations, absences from December 16,

1995, until 

January 6, 1996, must continue to be charged to LWOP for the duration of

the period of approved LWOP.

Employees who were on approved paid leave (or compensatory time off or

credit hours) on the first workday after December 15, 1995, should be

charged only for the approximate period of time from the beginning of

each individual employee’s normal workday until the time other similarly

situated employees departed from work after receiving furlough notices. 

The remaining period of time in the employee’s regularly scheduled tour of

duty must be recorded as an excused absence.

All employees affected by the lapse in appropriations that began on
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December 16, 1995, must now be deemed to have been in a pay status

from December 16, 1995, 

until January 6, 1996, and agencies must therefore recredit any sick or

annual leave that may have been deducted from an employee’s leave

account because the employee was considered at the time to be in a nonpay status.

3. Restoration of Forfeited Annual Leave

Excess annual leave (i.e., “use or lose” leave) that is not used before the

beginning of the new leave year (January 7, 1996, for most employees)

will be forfeited. However, forfeited annual leave that was scheduled in

advance (before the deadline specified in OPM regulations) must be

restored if there is an “exigency of the public business.” OPM’s

regulations delegate to the head of each agency the authority to determine

that an “exigency of the public business” existed.

OPM advises agencies to restore forfeited annual leave in a separate leave

account to each affected employee who performed work on a day during

the period from December 16, 1995, until January 6, 1996, on which

annual leave had been scheduled in advance for that employee in

accordance with OPM regulations. This guidance is based on the

conclusion that the “exigency of the public business” in this case is the

requirement to report for work in order to perform activities that were

excepted at the time under the terms of the Antideficiency Act.

Annual leave restored because leave was forfeited as a result of the lapse in

appropriations that began on December 16, 1995, must be scheduled and

used not later than the end of the leave year ending 2 years after the date

fixed by the agency head (or his or her designee) as the termination date of

the exigency of the public business that resulted in forfeiture of the annual

leave. Because the exigency in this case ended before the beginning of

leave year 1996, affected employees will have until the end of leave year

1997 to schedule and use their restored annual leave. 

4. Leave for Employees Who Return to Work

The legislation authorizing return to work provides that all excepted

employees will be covered by the normal leave policies as if no lapse in

appropriations had occurred. Therefore, beginning on January 6, 1996,

absences from duty must be charged to the appropriate category of paid or

unpaid leave. 
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5. Holidays

Except as provided below, all employees affected by the lapse in

appropriations will receive their regular holiday pay for the Christmas Day

and New Year’s Day holidays (and, if applicable, holiday premium pay for

work performed by or scheduled for an employee during his or her normal

hours of duty on one or both 

of these holidays, plus overtime pay for work in excess of the normal hours

of duty on the holiday).

As indicated in paragraph 2., above, employees who were on approved

leave without pay (LWOP) at any time from December 16, 1995, until

January 6, 1996, must continue to be charged LWOP for the duration of

the period of approved LWOP. Therefore, if such an employee was on

LWOP on both the last workday before the Christmas Day or New Year’s

Day holiday and the first workday after the holiday, he or she will not be

paid for the holiday. (This policy is consistent with the normal rules

governing entitlement to pay for a holiday when an employee is on LWOP. 

See 56 Comp. Gen. 393 (1977).)

6. Alternative Work Schedules (AWS)

Each agency should have a policy specifying when flexible work schedules

must be established and when they may be changed. Normally, such

schedules are established in advance of the pay period involved. Under

such a policy, an AWS nonworkday cannot be changed after the pay

period begins. 

7. Retirement Deductions and Actions 

Retirement deductions under the Civil Service Retirement System or the

Federal Employees Retirement System must be deducted from the

employee's retroactive basic pay for the period from December 16, 1995,

until January 6, 1996. The employing agency must also contribute to the

Retirement Fund its corresponding share for the retroactive payment. 

The total retirement deductions and agency contributions for each

employee should equal the amount that would have been withheld and

contributed had the employee not been affected by the lapse in

appropriations. These amounts should be remitted to OPM using the

normal procedures for retroactive adjustments.

The period of retroactive pay is fully creditable for retirement purposes

and is not considered LWOP.
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Agencies should process retirement actions effective during the period

from December 16, 1995, until January 6, 1996, as follows--

For employees who, on or before the requested retirement date,

submitted some notice of their desire to retire, agencies should make the

retirement effective as of the date requested (probably December 31,

1995, or January 1-3, 1996). The retirement request may be informal

(such as a letter requesting retirement) and can be either mailed or

personally submitted to the agency (even if put under the door). Any

additional required paperwork, such as the formal retirement application

form, may be completed after the date of enactment. No time periods

after the effective date of the retirement may be considered as duty time,

since the individual would no longer be an employee of the agency.

Some employees may request retirement retroactive to a date prior to

submission of the request. The Comptroller General has issued guidance

permitting retroactive personnel actions (including retirements) only

under limited enumerated circumstances--i.e., "where administrative or

clerical error (1) prevented a personnel action from being effected as

originally intended, (2) resulted in nondiscretionary administrative

regulations or policies not being carried out, or

 (3) has deprived the employee of a right granted by statute or

regulation." (See 58 Comp. Gen. 51, at 53 (1978).) It will be up to the

employing agency to determine in each case whether the Comptroller

General's criteria have been met.

If any retirement application has been delayed because of the lapse in

appropriations, it should be quickly processed and submitted to OPM so

that OPM will be able to begin annuity payments as soon as possible.

8. Thrift Savings Plan

Agencies with questions concerning the Thrift Savings Plan should

contact the Federal Retirement Thrift Investment Board at (202) 942-

1450.

9. Health Benefits

Some agencies were unable to process the open season enrollments

because the personnel and payroll staffs were furloughed. The

enrollments and enrollment changes that the employing offices received

during the open season period are effective on the first day of the first

pay period beginning on or after January 1, 1996, regardless of whether
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they were processed. 

Some employees may be eligible to enroll or change enrollment because

of an event that occurred during the period from December 16, 1995,

until January 6, 1996. In cases where the effective date would normally

be the first day of the first pay period following the day the employing

office receives the enrollment form, agencies should be flexible about

approving earlier effective dates (as if the employee had submitted the

enrollment form immediately following the event).

Health benefits deductions and contributions for each enrolled employee

should equal the amount that would have been deducted and contributed

had the employee not been affected by the lapse in appropriations. These

amounts should be remitted to OPM using the normal procedures for

retroactive adjustments.

10. Life Insurance

Because all affected employees will be paid for the period from December

16, 1995, until January 6, 1996, life insurance deductions and

contributions for each enrolled employee should equal the amount that

would have been deducted and contributed had the employee not been

affected by the lapse in appropriations. These amounts should be

remitted to OPM using the normal procedures for retroactive

adjustments.

11. Unemployment Insurance

Employees who are paid retroactively for the period from December 16,

1995, until January 6, 1996, and who received unemployment insurance

(UI) benefits for that period of unemployment will be required to repay the

UI benefits they received. The procedures for repayment of UI

overpayments to furloughed employees will be coordinated between the

employing agency, the affected employee, and the applicable State

Employment Security agency.

12. Documentation of Personnel Actions

Agencies should not process SF 50's to document a furlough resulting from

the lapse in appropriations that began on December 16, 1995, and SF 50's

that were processed must be canceled using Nature of Action Code “001.” 

Do not record the furlough with any document designated for long-term

filing in the Official Personnel Folder.
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Agencies need not provide a furlough notice to an employee who did not

receive a notice from December 16, 1995, until January 6, 1996.

13. OPM Contacts

Questions on pay and leave entitlements may be directed to the Office of

Compensation Policy on (202) 606-2858.

Questions on health benefits, life insurance, and retirement should be

directed to the Insurance Officer or Retirement Counselor of your agency. 

Retirement Counselors may contact the Agency Advisory Services

Division on (202) 606-0788. Insurance officers may contact the Office of

Insurance Programs, Insurance Policy and Information Division, on (202)

606-0191.

Questions on furlough procedures may be directed to the Office of Labor

Relations and Workforce Performance on (202) 606-2920.

Questions on the documentation of personnel actions may be directed to

the Office of Workforce Information on (202) 606-4415.
January 17, 1996

MEMORANDUM FOR DIRECTORS OF PERSONNEL (CPM-96-2)

FROM: ALLAN D. HEUERMAN

 ASSOCIATE DIRECTOR

 FOR HUMAN RESOURCES SYSTEMS

SUBJECT: Restoration of Forfeited Annual Leave to

Employees

 Affected by the Recent Lapse in Appropriations

On Saturday, January 6, 1996, the Office of Personnel Management, in consultation

with the Office of Management and Budget, issued instructions to directors of

personnel on pay and benefits for employees affected by the lapse in appropriations

that began on December 16, 1995. In an effort to provide timely advice and assistance

to Federal agencies in anticipation of a return to duty by Monday, January 8 (and the

need to process payrolls for the previous pay period), this guidance was issued within

about 12 hours after the President signed legislation providing retroactive

compensation for all Federal civilian employees who were affected by the lapse in

appropriations.

One of the issues addressed in our January 6, 1996, memorandum was the restoration

of forfeited annual leave. We advised agencies that they should--

restore forfeited annual leave . . . to each affected employee

who performed work on a day during the period from

December 16, 1995, until January 6, 1996, on which annual

leave had been scheduled in advance for that employee in

accordance with OPM regulations. [Emphasis added.]

Many agency personnel officials have contacted OPM and OMB during the 2 working

days since the issuance of these instructions to express concerns about the implications

of this policy. In particular, concerns have been expressed about the disparate impact

of this policy on employees who were prevented from using their previously scheduled

annual leave because of the lapse in appropriations, but who, unlike those “excepted”

employees who performed work during that period, would not be eligible for
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restoration of annual leave under the policy announced by OPM. Some pointed out

that a number of furloughed employees may have sustained financial loss or

disruptions in their plans because of uncertainties about when or whether they would

be paid for (or called back to work during) the furlough period.

Therefore, upon further consideration and discussion with the President’s Management

Council, we have determined that the guidance stated above should be amended as

follows:

Agencies should restore forfeited annual leave in a separate leave account to each

affected employee who was not permitted, because of the lapse in appropriations,

to use annual leave that had been scheduled in advance for that employee in

accordance with OPM regulations. OPM regulations require that such leave

must have been scheduled before the beginning of the third pay period prior to

the end of the leave year (November 26, 1995, for most employees). Any annual

leave restored under this policy must be scheduled and used not later than the

end of leave year 1997.

This guidance is based on the conclusion that the “exigency of the public business” in

this case is the lapse in appropriations, which prevented the use of annual leave by all

affected employees, whether they were considered at the time to be “excepted” or

furloughed.

To ensure that all affected employees are treated in a similar fashion, it is expected that

all agencies will follow the guidance stated above. Questions about this policy

decision should be directed to OPM Director Jim King or OMB Deputy Director for

Management John Koskinen.