This section of the FEDERAL REGISTER

contains regulatory documents having general

applicability and legal effect, most of which

are keyed to and codified in the Code of

Federal Regulations, which is published under

50 titles pursuant to 44 U.S.C. 1510.

The Code of Federal Regulations is sold by

the Superintendent of Documents. Prices of

new books are listed in the first FEDERAL

REGISTER issue of each week.

Rules and Regulations Federal Register

10681

Vol. 62, No. 46

Monday, March 10, 1997

OFFICE OF PERSONNEL

MANAGEMENT

5 CFR Parts 351 and 630

RIN 3206–AH64

Reduction in Force and Mandatory

Exceptions

AGENCY: Office of Personnel

Management.

ACTION: Interim rulemaking.

SUMMARY: The Office of Personnel

Management (OPM) is issuing interim

regulations that implement recent

legislation giving employees the right to

use annual leave to establish initial

retirement eligibility for employees in

reduction in force and other

restructuring situations. These

regulations also implement related

provisions concerning the availability of

annual leave to qualify for continuance

of health benefits in the same situation.

DATES: These regulations are effective

March 10, 1997. Comments must be

received on or before May 9, 1997.

ADDRESSES: Send or deliver written

comments to: Mary Lou Lindholm,

Associate Director for Employment

Service, Room 6F08, Officer of

Personnel Management, Washington,

DC 20415.

FOR FURTHER INFORMATION CONTACT:

(part 351) Thomas A. Glennon or

Edward P. McHugh, (202) 606–0960,

FAX (202) 606–2329; (part 630) Jo Ann

Perrini, (202) 606–2858, FAX (202) 606–

0824.

SUPPLEMENTARY INFORMATION: Section

634 of the Treasury, Postal Service, and

General Government Appropriations

Act, 1997, as contained in section 101(f)

of the Omnibus Consolidated

Appropriations Act, 1997 (P.L. 104–208,

approved September 30, 1996), provides

that an employee who is being

involuntarily separated from an agency

due to reduction in force or transfer of

function may elect to use annual leave

and remain on the agency’s rolls after

the effective date the employee would

otherwise have been separated in order

to establish initial eligibility for

immediate retirement, including

discontinued service or voluntary early

retirement. The same option is also

available to acquire eligibility to

continue health benefits into retirement.

These provisions are codified in new 5

U.S.C. 6302(g).

Since January 1993, OPM has

provided similar benefits by regulation.

Presently, an agency may elect to retain

on annual leave an employee who has

received a specific reduction in force

notice so that the employee may

establish initial eligibility for

retirement, and/or for continuance of

health benefits into retirement (58 FR

5563, January 22, 1993, as amended at

60 FR 2678, January 11, 1995). For an

employee to achieve initial eligibility in

a reduction in force situation, agencies

use a ‘‘Permissive Temporary

Exception’’ under authority of section 5

CFR 351.608(d) to retain an employee

past the effective date that the employee

would have been separated.

The new 5 U.S.C. 6302(g) required

two major changes to OPM’s regulatory

provisions: (1) an employee who is

being involuntarily separated now has a

right to use his or her annual leave to

achieve initial eligibility for retirement

and/or continued health benefits

coverage; and (2) this right extends to

transfer of function relocation

situations.

To implement 5 U.S.C. 6302(g),

section 5 CFR 351.606, Mandatory

exceptions, is revised by adding a new

paragraph (b).

Section 5 CFR 351.606(b)(1) provides

that an employee who is being

involuntarily separated from an agency

because of reduction in force under

authority of 5 CFR part 351 may elect

to use annual leave past the date that

the employee would otherwise have

been separated for the purpose of

establishing initial eligibility under

sections 5 U.S.C. 8336, 8412, or 8414 for

immediate retirement, including

discontinued service or voluntary early

retirement.

Section 5 CFR 351.606(b)(1) also

provides the same election option so

that an employee who is being

involuntarily separated from an agency

because of reduction in force may use

annual leave for the purpose of

acquiring initial eligibility under 5

U.S.C. 8905 to continue health benefits

into retirement.

Section 5 CFR 351.606(b)(2) provides

that an employee who is being

involuntarily separated as an adverse

action because of the employee’s

decision to decline relocation (including

transfer of function) may use annual

leave to remain on the agency’s rolls

after the effective date of the relocation

to establish initial eligibility for

immediate retirement under 5 U.S.C.

8336, 8412, or 8414 (including

discontinued service or voluntary early

retirement), and/or to establish initial

eligibility under 5 U.S.C. 8905 to

continue health benefits coverage into

retirement.

Section 5 CFR 351.606(b)(3) provides

that the entitlements under 5 U.S.C.

6302(g) apply to employees covered by

chapter 63 of title 5, United States Code.

Section 5 CFR 351.606(b)(4) provides

that an agency may not retain any

employee under the provisions of 5

U.S.C. 6302(g) past the date that the

employee first becomes eligible for

immediate retirement, and/or for

continuation of health benefits into

retirement.

Section 5 CFR 351.606(b)(5) provides

that, except as permitted by 5 CFR

351.608(d), an agency may not approve

an employee’s use of any other type of

leave after the employee has been

retained under a temporary exception.

Section 5 CFR 351.606(b)(6) clarifies

that the annual leave that may be used

for the purpose of remaining on an

agency’s rolls to establish eligibility for

immediate retirement and/or establish

initial eligibility to continue health

benefits coverage into retirement is

described in 5 CFR 630.212.

Section 630.212 states that all

accumulated, accrued, and restored

annual leave to an employee’s credit

prior to the effective date of a reduction

in force or relocation and annual leave

earned by an employee while in a paid

leave status after the effective date of the

reduction in force or relocation may be

used for these purpose. However,

annual leave that is advanced to an

employee under 5 U.S.C. 6302(d) may

not be used for these purposes. In

addition, an employing agency may

permit an approved leave recipient to

use for these purposes any or all annual

leave donated under 5 CFR part 630,
10682 Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Rules and Regulations

subpart I, or made available under 5

CFR part 630, subpart J, as of the

effective of the reduction in force or

relocation.

In conforming changes, section 5 CFR

351.606(a) is revised with a reference

label, and former section 5 CFR

351.606(b) is found in a new section 5

CFR 351.606(c), also with a reference

label.

In another conforming change, section

5 CFR 351.608 is revised as a result of

the entitlements provided under 5

U.S.C. 6302(g). Also, a new section 5

CFR 351.608(e) provides that an

employee who is not covered by chapter

63 of title 5, United States Code, but

who is being involuntarily separated

from an agency because of reduction in

force under part 5 CFR 351, may, at the

agency’s discretion, elect to use annual

leave past the date that the employee

would otherwise have been separated

for the purpose of establishing initial

eligibility under sections 5 U.S.C. 8336,

8412, or 8414 (or other authority) for

immediate retirement, including

discontinued service or voluntary early

retirement, and/or establishing

eligibility under 5 U.S.C. 8905 (or other

authority) to continue health benefits

coverage into retirement.

An additional conforming change

revises section 351.506(b) to provide,

consistent with prior policy, that the

retention standing of each employee

retained in a competitive level as an

exception under section 351.606(b), as

well as sections 351.607 or section

351.608, is determined as of the date the

employee would have been released had

the exception not been used. The

retention standing of each employee

retained under any of these three

exceptions remains fixed until

completion of the reduction in force

action which resulted in the mandatory

or permissive temporary retention.

Waiver of Notice of Proposed

Rulemaking and Delay in Effective Date

Pursuant to 5 U.S.C. 553(b)(3)(B), I

find that good cause exists for waiving

the general notice of proposed

rulemaking because it would be

contrary to the public interest to delay

access to benefits. Also, pursuant to 5

U.S.C. 553(d)(3), I find that good cause

exists to make this amendment effective

in less than 30 days. The delay in the

effective date is being waived because

these regulations provide a benefit

authorized by statute rather than

eliminating or modifying existing

benefits. This amendment gives full

effect to the benefits extended by the

amended provisions of the statute at the

earliest practicable date.

Regulatory Flexibility Act

I certify that this regulation will not

have a significant economic impact on

a substantial number of small entities

because it only affects Federal

employees.

Executive Order 12866, Regulatory

Review

This rule has been reviewed by the

Office of Management and Budget in

accordance with Executive Order 12866.

List of Subjects in Parts 351 and 630

Administrative practice and

procedure, Government employees.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, OPM is amending parts

351 and 630 of title 5, Code of Federal

Regulations, as follows:

PART 351—REDUCTION IN FORCE

1. The authority citation for part 351

continues to read as follows:

Authority: 5 U.S.C. 1302, 3502, 3503; sec.

351.801 also issued under E.O. 12828, 58 FR

2965.

2. In § 351.506, paragraph (b) is

revised to read as follows:

§ 351.506 Effective date of retention

standing.

* * * * *

(b) The retention standing of each

employee retained in a competitive

level as an exception under

§ 351.606(b), § 351.607, or § 351.608, is

determined as of the date the employee

would have been released had the

exception not been used. The retention

standing of each employee retained

under any of these provisions remains

fixed until completion of the reduction

in force action which resulted in the

temporary retention.

* * * * *

3. § 351.606 is revised to read as

follows:

§ 351.606 Mandatory exceptions.

(a) Armed Forces restoration rights.

When a agency applies § 351.601 or

§ 351.605, it shall give retention

priorities over other employees in the

same subgroup to each group I or II

employee entitled under 38 U.S.C. 2021

or 2024 to retention for, as applicable,

6 months or 1 year after restoration, as

provided in part 353 of this chapter.

(b) Use of annual leave to reach initial

eligibility for retirement or continuance

of health benefits. (1) An agency shall

make a temporary exception under this

section to retain an employee who is

being involuntarily separated under this

part, and who elects to use annual leave

to remain on the agency’s rolls after the

effective date the employee would

otherwise have been separated by

reduction in force, in order to establish

initial eligibility for immediate

retirement under 5 U.S.C. 8336, 8412, or

8414, and/or to establish initial

eligibility under 5 U.S.C. 8905 to

continue health benefits coverage into

retirement.

(2) An agency shall make a temporary

exception under this section to retain an

employee who is being involuntarily

separated under authority of part 752 of

this chapter because of the employee’s

decision to decline relocation (including

transfer of function), and who elects to

use annual leave to remain on the

agency’s rolls after the effective date the

employee would otherwise have been

separated by adverse action, in order to

establish initial eligibility for immediate

retirement under 5 U.S.C. 8336, 8412, or

8414, and/or to establish initial

eligibility under 5 U.S.C. 8905 to

continue health benefits coverage into

retirement.

(3) An employee retained under

paragraph (b) by this section must be

covered by chapter 63 of title 5, United

States Code.

(4) An agency may not retain an

employee under paragraph (b) of this

section past the date that the employee

first becomes eligible for immediate

retirement, or for continuation of health

benefits into retirement, except that an

employee may be retained long enough

to satisfy both retirement and health

benefits requirements.

(5) Except as permitted by 5 CFR

351.608(d), an agency may not approve

an employee’s use of any other type of

leave after the employee has been

retained under a temporary exception

authorized by paragraph (b) of this

section.

(6) Annual leave for purposes of

paragraph (b) of this section is described

in § 630.212 of this chapter.

(c) Documentation. Each agency shall

record on the retention register, for

inspection by each employee, the

reasons for any deviation from the order

of release required by § 351.601 or

§ 351.605.

4. Section 351.608 is revised to read

as follows:

§ 351.608 Permissive temporary

exceptions.

(a) General. (1) In accordance with

this section, an agency may make a

temporary exception to the order of

release in § 351.601, and to the action

provisions of § 351.603, when needed to

retain an employee after the effective

date of a reduction in force. Except as
Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Rules and Regulations 10683

otherwise provided in paragraphs (c)

and (e) of this section, an agency may

not make a temporary exception for

more than 90 days.

(2) After the effective date of a

reduction in force action, an agency may

not amend or cancel the reduction in

force notice of an employee retained

under a temporary exception so as to

avoid completion of the reduction in

force action. This does not preclude the

employee from receiving or accepting a

job offer in the same competitive area in

accordance with a Reemployment

Priority List established under part 330,

subpart B, of this chapter, or under a

Career Transition Assistance Plan

established under part 330, subpart E, of

this chapter, or equivalent programs.

(b) Undue interruption. An agency

may make a temporary exception for not

more than 90 days when needed to

continue an activity without undue

interruption.

(c) Government obligation. An agency

may make a temporary exception to

satisfy a Government obligation to the

retained employee without regard to the

90-day limit set forth under paragraph

(a)(1) of this section.

(d) Sick leave. An agency may make

a temporary exception to retain on sick

leave a lower standing employee

covered by chapter 63 of title 5, United

States Code (or other applicable leave

system for Federal employees), who is

on approved sick leave on the effective

date of the reduction in force, for a

period not to exceed the date the

employee’s sick leave is exhausted. Use

of sick leave for this purpose must be in

accordance with the requirements in

part 630, subpart D, of this chapter (or

other applicable leave system for

Federal employees). Except as

authorized by § 351.606(b), an agency

may not approve an employee’s use of

any other type of leave after the

employee has been retained under this

paragraph (d).

(e)(1) An agency may make a

temporary exception to retain on

accrued annual leave a lower standing

employee who:

(i) Is being involuntarily separated

under this part;

(ii) Is covered by a Federal leave

system under authority other than

chapter 63 of title 5, United States Code;

and,

(iii) Will attain first eligibility for an

immediate retirement benefit under 5

U.S.C. 8336, 8412, or 8414 (or other

authority), and/or establish eligibility

under 5 U.S.C. 8905 (or other authority)

to carry health benefits coverage into

retirement during the period

represented by the amount of the

employee’s accrued annual leave.

(2) An agency may not approve an

employee’s use of any other type of

leave after the employee has been

retained under this paragraph (e).

(3) This exception may not exceed the

date the employee first becomes eligible

for immediate retirement or for

continuation of health benefits into

retirement, except that an employee

may be retained long enough to satisfy

both retirement and health benefits

requirements.

(4) Accrued annual leave includes all

accumulated, accrued, and restored

annual leave, as applicable, in addition

to annual leave earned and available to

the employee after the effective date of

the reduction in force. When approving

a temporary exception under this

provision, an agency may not advance

annual leave or consider any annual

leave that might be credited to an

employee’s account after the effective

date of the reduction in force other than

annual leave earned while in an annual

leave status.

(f) Other exceptions. An agency may

make a temporary exception under this

section to extend an employee’s

separation date beyond the effective

date of the reduction in force when the

temporary retention of a lower standing

employee does not adversely affect the

right of any higher standing employee

who is released ahead of the lower

standing employee. The agency may

establish a maximum number of days,

up to 90 days, for which an exception

may be approved.

(g) Notice to employees. When an

agency approves an exception for more

than 30 days, it must:

(1) Notify in writing each higher

standing employee in the same

competitive level reached for release of

the reasons for the exception and the

date the lower standing employee’s

retention will end; and

(2) List opposite the employee’s name

on the retention register the reasons for

the exception and the date the

employee’s retention will end.

PART 630—ABSENCE AND LEAVE

5. The authority citation for part 630

continues to read as follows:

Authority: 5 U.S.C. 6311; § 630.301 also

issued under Pub. L. 103–356, 108 Stat. 3410;

§ 630.303 also issued under 5 U.S.C. 6133(a);

§§ 630.306 and 630.308 also issued under 5

U.S.C. 6304(d)(3), Pub. L. 102–484, 106 Stat.

2722, and Pub. L. 103–337, 108 Stat. 2663;

subpart D also issued under Pub. L. 103–329,

108 Stat. 2423; § 630.501 and subpart F also

issued under E.O. 11228, 30 FR 7739, 3 CFR

1974 Comp., p. 163; subpart G also issued

under 5 U.S.C. 6305; subpart H also issued

under 5 U.S.C. 6326; subpart I also issued

under 5 U.S.C. 6332, Pub. L. 100–566, 102

Stat. 2834, and Pub. L. 103–103, 107 Stat.

1022, subpart J also issued under 5 U.S.C.

6362, Pub. L. 100–566, and Pub. L. 103–103;

subpart K also issued under Pub. L. 102–25,

105 Stat. 92; and subpart L also issued under

5 U.S.C. 6387 and Pub. L. 103–3, 107 Stat.

23.

6. In part 630, § 630.212 is added to

read as follows:

§ 630.212 Use of annual leave to establish

initial eligibility for retirement or

continuation of health benefits.

(a) An employee may elect to use

annual leave and remain on the agency’s

rolls in order to establish initial

eligibility for immediate retirement

under 5 U.S.C. 8336, 8412, or 8414, and/

or to establish initial eligibility under 5

U.S.C. 8905 to continue health benefits

coverage into retirement, as provided in:

(1) Section 351.606(b)(1) for an

employee who would otherwise have

been separated by reduction in force

procedures under part 351 of this

chapter; or

(2) Section 351.606(b)(2) of this

chapter for an employee who would

otherwise have been separated by

adverse action procedures under

authority of part 752 of this chapter

because of the employee’s decision to

decline relocation (including transfer of

function).

(b)(1) Annual leave that may be used

for the purposes described in paragraph

(a) of this section includes all

accumulated, accrued, and restored

annual leave to the employee’s credit

prior to the effective date of the

reduction in force or relocation

(including transfer of function) and

annual leave earned by an employee

while in a paid leave status after the

effective date of the reduction in force

or relocation (including transfer of

function).

(2) Annual leave that is advanced to

an employee under 5 U.S.C. 6302(d),

including any advance annual leave that

may be credited to an employee’s leave

account after the effective date of the

reduction in force or relocation

(including transfer of function), may not

be used for purpose of this section.

(3) For purposes of this section, the

employing agency may approve the use

of any or all annual leave donated to an

employee under part 630, subpart I, of

this chapter (Voluntary Leave Transfer

Program), or made available to the

employee under part 630, subpart J, of

this chapter (Voluntary Leave Bank

Program), as of the effective date of the

reduction in force or relocation.

[FR Doc. 97–5835 Filed 3–7–97; 8:45 am]

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