Changes in Bonus Policy Coming

Several changes in the government’s policies on paying recruitment, relocation and retention payments are due to kick in May 1 under the Federal Workforce Flexibility Act enacted last year. These changes, designed to help the government attract and retain employees, include authorities to: pay larger recruitment and relocation bonuses based on the length of an agreed-upon service period, capped at 25 percent of the employee’s annual salary multiplied by the number of years the employee agrees to serve in the position (up to a maximum of four years); waive the normal cap on recruitment and relocation bonuses because of a critical agency need in order to pay higher amounts over shorter periods of time (not to exceed a total of 100 percent of the employee’s starting salary); pay retention bonuses to employees who are likely to leave for other federal positions, not just for outside positions; and pay recruitment, relocation, and retention bonuses in alternative ways, such as in installments or in a lump sum at the end of a service period. Also, agencies could request that OPM waive the limitation on an individual retention bonus (25 percent of salary) or a group retention bonus (10 percent of salary) to allow retention bonus payments of up to 50 percent of salary based on a critical agency need.