SECTION 16. Recruitment and Relocation Bonuses And Retention Allowances

Who gets them

An operating unit may pay a recruitment or relocation bonus or a retention allowance up to 25 percent of basic pay in order to fill a position with a highly qualified candidate or to retain a highly qualified employee. Positions to which these incentives apply include positions under the General Schedule, the Executive Schedule, the Senior Executive Service, senior level or scientific or professional positions under 5 U.S.C. 5376, law enforcement officer positions under 5 U.S.C. 8331 or 8401, positions filled by Presidential appointment, or positions in categories for which OPM approval is necessary.

Approving officials

heads of operating units are the approving officials for recruitment bonuses, relocation bonuses, and retention allowances to employees in their organizations. This authority may be redelegated to appointing officials designated in DAO 202-250. However, each determination to pay a recruitment or relocation bonus or a retention allowance shall be reviewed and approved at a level higher than the level which made the original determination. These officers also have authority to reduce or terminate the payment of retention allowance as circumstances warrant. The Director, OPM, is the approving official for a recruitment bonus, relocation bonus, or retention allowance to the Secretary of Commerce.

Recruitment bonuses

"Employee" means an individual who is newly appointed in the organization, or an individual who is in receipt of an offer of appointment who has signed a service agreement in conjunction with a recruitment bonus.
"Newly appointed" means:



When are they proper. A recruiting bonus may be paid when, in the absence of the bonus, it would be difficult to fill a position with a highly qualified employee. How are they supported. By OPM regulation, a recruitment bonus and the amount of such bonus must be justified in writing by an approving authority before a recruitment bonus is paid. However, an approving official may authorize recruitment criteria and a bonus range in advance for a category of positions in order to allow a supervisor to offer recruitment bonuses without further case by case review by the approving authority.

The determination to pay a recruitment bonus must be based on factors such as proportion of vacant positions; offers made and declinations of offer received for similar positions; competition in the labor market; turnover in similar positions, special qualifications required; and the practicality of offering a superior qualifications appointment alone or in combination with a recruitment bonus.

When considering whether to pay a recruitment bonus versus a salary above the minimum rate based on superior qualifications, it should be remembered that the latter has a lasting effect which follows the employee throughout his/her career. It is, therefore, more costly than a recruitment bonus.

How are they paid Recruitment bonuses are calculated as a percentage of basic pay and paid out as a lump sum. They may range up to 25 percent of base pay and are not considered part of the employee's rate of basic pay for any purpose.

Bonus agreement. Before a recruitment bonus may be paid, a newly appointed employee must sign a service agreement which requires completion of a specified period of employment with the organization or successor organization (in case of a transfer of function) but no less than 6 months.

An employee who voluntarily terminates employment with the organization before fulfilling the period of the service agreement is indebted to the government for a pro rata share of the recruitment bonus. The balance owing will be collected by salary offset unless repayment is waived by an official with appropriate waiver authority.

Relocation bonuses

"Employee" means an individual who is appointed without a break in service to a position in a different commuting area or whose duty station is changed temporarily or permanently to a different commuting area.

When are they proper.
A relocation bonus may be paid when, in the absence of the bonus, it will be difficult to fill a position. A law enforcement officer may be paid a bonus equal to the higher of 25 percent of basic pay or $15,000.

How are they supported.
The determination to pay a relocation bonus must be justified in writing. An approving authority may authorize criteria and a bonus range in advance so that a supervisor may offer relocation bonuses for targeted position without further case by case review of the approving authority.

Additionally, case by case approval of relocation bonuses may be waived when the employee has a fully successful (or better) rating of record and is (1) a member of a group of employee subject to a mobility agreement when a relocation bonus is deemed necessary to retain employees subject to such a mobility agreement; or a major organizational unit of the agency relocates and the bonus is needed to encourage specified groups of employees of the unit to transfer so that essential business is not disrupted.

The determination to pay a relocation bonus must be based on factors such as proportion of vacant positions; offers made and declinations of offer received for similar positions; competition in the labor market; turnover in similar positions, and special qualifications required.

How are they paid.
A relocation bonus is calculated as a percentage of the employee's rate of basic pay and paid as a lump sum. A relocation bonus is not to be considered part of base pay for any purpose.

Bonus Agreement.
Before being paid a relocation bonus, the employee must establish a residence in the new commuting area. The service agreement shall specify the period of service required with the organization in the new location or with the successor organization (in the case of a transfer of function). If an employee leaves his or her position before completing the term of the service agreement, he or she shall be indebted to the government. A pro rata share of the relocation bonus shall be recovered by salary offset unless repayment is waived by an official with appropriate waiver authority.

Retention allowances

When are they proper.
A retention allowance may be paid when, absent a retention allowance, a current employee with unique or unusually high qualifications important to meeting the special needs of the organization will likely leave the Federal service for any reason.

How are they supported.
Justification for a retention allowance shall be in writing and must address the employee's unusually high or unique qualifications or the need of the agency for the employee's services. Care must be taken to describe the impact of the employee's departure on the project or function deemed essential to the unit's mission. In justifying the amount of the retention allowance, difficulties in recruiting for person with similar qualifications, and the worth of the compensation package being offered by the competing employer should be considered.

How are they paid.
A retention allowance is computed as a percentage of the employee's rate of basic pay (up to 25 percent) and paid out at the same time and in the same manner as the employee's basic pay. A retention allowance is not considered base pay for any purpose.

A retention allowance is not paid during any period of service required by a recruitment or relocation service agreement. No part of a retention allowance may be paid if when added to the employee's estimated aggregate pay it would cause aggregate compensation actually received during the calendar year to exceed the rate paid Level I of the Executive Schedule at the end of the year.

An operating unit may continue payment of a retention allowance as long as the conditions which gave rise to the retention allowance continue to exist. If the labor market or the need for the employee's services makes payment of a retention allowance at the original level or any payment unnecessary, it may, on its own motion, reduce or discontinue a retention allowance. Reduction or discontinuance of a retention allowance is not appealable.

References
5 U.S.C. 5753, 5754, and 5755
5 CFR 575

BONUS SERVICE AGREEMENT

EMPLOYEE ________________________________ SSN______________

POSITION_______________________________ GRADE______________

DUTY STATION_______________________________________________

BUREAU______________________________________________________

EMPLOYMENT TERM__________________________________________

BONUS TYPE:
RECRUITMENT_________________ RELOCATION_________________

BONUS AMOUNT $______________% OF SALARY__________________

In return for the payment of the bonus specified above, I agree to accept the position and the terms of employment specified below.

  1. I understand that if the performance of my duties in this position is rated less than fully satisfactory during this period, my employment may be terminated and I shall be indebted to the Department of Commerce for a pro rata share of the bonus for the remaining portion of this service agreement. Such repayment amount will be calculated by dividing the total amount of the bonus by the entire service period (expressed in months). The repayment amount will be this result multiplied by the remaining full months of the service agreement.

  2. I understand that if my employment is terminated during the specified period for conduct unbecoming a Federal employee (action taken under 5 CFR 752), I will be obliged to repay a pro rata share of the bonus.

  3. I understand that if I accept employment with another organization, including one elsewhere in the Department of Commerce in another agency of the Federal government, I am obliged to ready a pro rata share amount of this bonus.


EMPLOYEE SIGNATURE______________________________ DATE___________

MANAGER'S SIGNATURE______________________________ DATE__________

SECOND LEVEL MANAGER'S SIGNATURE
___________________________________ DATE______________

A copy of this agreement must be sent to the servicing human resources management office for inclusion in the Official Personnel Folder.