Federal Manager's Daily Report

The IRS followed its contractual obligations with the NTEU union when it acted to limit employee performance awards due to sequestration in 2013, the Treasury Inspector General for Tax Administration has concluded.

The report noted that the national agreement between the agency and the union provides for employee awards with 1.75 percent of aggregate salary. The agency can change the funding level, but it is contractually obligated to give the NTEU 60 days’ notice of its intent to do so and to engage in bargaining.

In February 2013, OMB ordered agencies not to issue discretionary monetary awards while sequestration was in place, unless such awards were legally required. The agency then provided NTEU with a 60-day notice of its intent to reduce the bargaining unit performance awards and the NTEU responded notifying the IRS of its intent to engage in bargaining. That issue got caught up with general bargaining over sequestration’s impact, mediation was invoked and NTEU filed an unfair labor practice complaint.

Later OMB guidance rescinded the ban and allowed awards only within 1 percent of aggregate salary and the parties ultimately entered a settlement providing for payments of that amount even though it is lower than the contract figure.