Fedweek

Budget proposes increase in buyout maximum to $40,000 government-wide, adds critical-skills incentive.

Among the provisions of the Trump administration’s latest budget proposal that might be viewed as a positive for federal employees is a repeat from prior proposals is a request to raise the buyout maximum payment to $40,000 government-wide to match the maximum at DoD, and a request to create a new form of incentive payment for employees in high-demand occupations.

The buyout request appears, as before, in a section of the budget on the State Department, but the language would change the section of law that governs buyouts in general. At agencies other than DoD, the maximum has been frozen at the $25,000 set when buyout authority was created early in the Clinton administration.

Prior similar proposals have argued that $25,000 is no longer a sufficient incentive to induce employees to leave. Those who accept buyouts further may not return to the federal government within five years unless they repay the full pre-tax amount, with limited exceptions.

The maximum was raised to $40,000 at DoD by a law passed late in 2016 under the Obama administration—which had requested the boost for all agencies although Congress approved it only for DoD. In each budget proposal since, the Trump administration also has argued for extending the higher amount government-wide.

That request came close to enactment last year when the Senate approved it as part of the DoD authorization bill. However, it was dropped in a conference with the House on grounds that under budget rules, the additional cost would have to be offset with reductions in benefits to military retirees.

The proposed new “critical skills incentive” would operate much like the current authority for recruitment and retention incentives. OPM could designate government-wide—or agencies could designate for their own purposes, subject to OPM review—positions that serve a critical need in which there is a high demand or a shortage of employees with the needed skills. Employees in those positions would be eligible for up to an additional 25 percent of basic pay, with a required service agreement.