Following is the key portion of rules recently proposed by OPM to make changes in recruiting, retention and relocation incentive payments, commonly known as the 3Rs.
The U.S. Office of Personnel Management (OPM) is issuing proposed regulations to improve oversight of group recruitment incentive determinations and all retention incentives; add succession planning to the list of factors that an agency may consider before approving a retention incentive; provide that OPM may require data on recruitment, relocation, and retention incentives from agencies on an annual basis; and make additional minor clarifications and corrections.
Administration and Oversight of Recruitment, Relocation, and Retention Incentives In May 2009, OPM announced a project to review and improve the administration and oversight of recruitment, relocation, and retention incentives (3Rs). In a memorandum to heads of executive departments and agencies, OPM asked agencies to review their 3Rs programs to ensure that ongoing and new authorizations for payments to employees are used only when necessary to support the agency’s mission and recommended agencies review all retention incentives at least annually. In July 2009, OPM asked each agency to review and, if needed, update its 3Rs plans, as well as approval and internal monitoring procedures to ensure they meet the requirements in 5 CFR part 575, subparts A, B, and C. In August 2009, OPM convened a work group of compensation experts from the 12 Federal agencies that used the greatest number of 3Rs in 2007 to develop recommendations for improving the administration and oversight of the 3Rs authorities. The work group recommended that OPM issue proposed regulations to require agencies to review group recruitment incentives and all retention incentives at least annually to determine whether they should be modified or discontinued based on new or changed conditions. This will help agencies ensure that recurring recruitment or retention incentive authorizations for the same group of employees (or individual employees, in the case of retention incentives) are appropriate. These proposed regulations support the recommendations made by OPM in the May 2009 memo and by the work group.
Under 5 CFR 575.105, an agency may target groups of similar positions that have been difficult to fill in the past or that are likely to be difficult to fill in the future and may make the determination to offer a recruitment incentive to newly-appointed employees on a group basis. OPM proposes revising 5 CFR 575.105(b) to require that each agency review each decision to target a group of similar positions at least annually to determine whether the positions are still likely to be difficult to fill. An authorized agency official must certify this determination in writing. An agency that determines a group of similar positions is no longer likely to be difficult to fill may no longer offer a group recruitment incentive to newly-appointed employees of that group.
As provided in 5 U.S.C. 5753(b)(2)(B)(ii)(II), an agency may pay a relocation incentive only if the employee must relocate to accept a position in a different geographic area. In order to make this determination, the regulations in 5 CFR 575.205(b) require that an employee establish a residence in the new geographic area before the agency may pay a relocation incentive to the employee. OPM proposes revising 5 CFR 575.205(b) by adding a requirement that an employee maintain residency in the new geographic area for the duration of the service agreement in order to receive relocation incentive payments. OPM also proposes revising 5 CFR 575.211(b) to require that an authorized agency official terminate a relocation incentive service agreement if an employee fails to maintain residency in the new geographic area for the duration of the service agreement. These changes will make the regulations more consistent with the requirement in the law that an employee must relocate to receive a relocation incentive.
Retention Incentives Annual Review
OPM’s regulations in 5 CFR 575.311 are clear that each agency is responsible for terminating retention incentives when conditions change such that the original determination to pay the incentive no longer applies or when payment is no longer warranted. Agencies are currently required under Sec. 575.311(f) to review each determination to pay a retention incentive without a service agreement at least annually to determine whether the payment is still warranted. OPM proposes revising Sec. 575.311(a) to require that agencies also review each determination to pay a retention incentive that is subject to a service agreement at least annually to determine whether the original determination to pay the retention incentive still applies or whether payment is still warranted and certify this determination in writing. This will ensure all retention incentive authorizations are reviewed at least annually, whether associated with a service agreement or not.
An agency must consider the factors in 5 CFR 575.306(b), as applicable to the case at hand, in determining whether the unusually high or unique qualifications of an employee or a special need of the agency for an employee’s services makes it essential to retain the employee and that the employee would be likely to leave the Federal service in the absence of a retention incentive. OPM proposes adding another factor for agencies to consider as follows: “The quality and availability of the potential sources of employees that are identified in the agency’s succession plan, who possess the competencies required for the position, and who, with minimal training, cost, and disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the employee.” Succession planning is a critical success factor in strategic workforce analysis, planning, and decision making. OPM currently requires each agency to establish a succession plan to fill supervisory and managerial positions. (See 5 CFR 412.201 and 250.202(c)(2).) In addition, OPM’s Human Capital Assessment and Accountability Framework advises that a succession plan should include specific goals and leadership positions needed, target positions and key leadership competencies, potential sources of talent that best support the agency’s mission and culture, and recruitment or development strategies needed to ensure availability of well-qualified staff to fill leadership positions at all levels. Agencies currently have the flexibility to consider their succession planning efforts in the decision process for awarding retention incentives as “other supporting factors” under 5 CFR 575.306(b)(8). However, specifically listing the factor in this section of the regulations will strengthen the relationship between succession planning and retention incentives.
OPM is also taking this opportunity to correct some erroneous references in Sec. 575.305(c).
Currently, Senior Executive Service (SES) members paid under 5 U.S.C. 5383 are eligible for recruitment, relocation, and retention incentives under 5 CFR 575.103(a)(3), 575.203(a)(3), and 575.303(a)(3), unless the SES member is excluded under one of the conditions in 5 CFR 575.104, 575.204, and 575.304. Some of the exclusions are established under 5 U.S.C. 5753(a)(2) and 5754(a)(2), while the others are established under regulatory authority consistent with the intent of the law. All of the exclusions in the law and regulations are political appointees or individuals whose political appointments are pending. For example, an agency may not pay a recruitment, relocation, or retention incentive to an employee in a position to which the individual is appointed by the President with or without the advice and consent of the Senate.
An agency made OPM aware of an extremely rare situation in which an individual was appointed by the President, without the advice and consent of the Senate, to a position in the career SES. The agency had properly determined that the position is a career reserved position as that term is defined in 5 U.S.C. 3132. Such an employee should be eligible for a recruitment, relocation, or retention incentive because the employee serves as a career appointee while in the Presidential appointment. A career SES member who accepts a Presidential appointment and no longer serves as a career appointee under the Presidential appointment would not be eligible for recruitment, relocation, or retention incentives. Note also that coverage under the 3Rs authorities is not among the elections available to an individual under 5 CFR part 317, subpart H. Therefore, OPM proposes revising 5 CFR 575.104(d)(1), 575.204(d)(1), and 575.304(d)(1) to clarify that an agency may pay a recruitment, relocation, or retention incentive to an employee in an SES position in which the individual serves as a career appointee, even if the member is appointed by the President without the advice and consent of the Senate.
OPM also proposes revising 5 CFR 575.104(d), 575.204(d), and 575.304(d) to clarify that all individuals whose SES limited appointments are cleared through the White House Office of Presidential Personnel are ineligible for 3Rs payments. Limited term and limited emergency SES appointments may be political appointments if made to positions that are political in character (e.g., established for an individual pending Presidential appointment, for political transition purposes, or for other political purposes of the agency or Administration) and should be excluded from coverage as other political positions are excluded from coverage.
Another agency recently asked OPM whether a limited term or limited emergency SES member could receive a recruitment incentive if selected for a career SES position. Recruitment incentives may be paid to an employee who is “newly appointed” to the Federal Government, as that term is defined in 5 CFR 575.102. The definition includes the first appointment (regardless of tenure) as an employee of the Federal Government, an appointment following a break in service of at least 90 days from a previous appointment as an employee of the Federal Government, or, in certain cases, an appointment following a break in service of less than 90 days from a previous appointment as an employee of the Federal Government. OPM proposes adding that a break in service of at least 90 days would not be required if the previous appointment was a position to which the individual was appointed as an SES limited term appointee or limited emergency appointee (except as described in the next paragraph). This would be consistent with how a time-limited appointment in the competitive or excepted service is not subject to the 90-day break in service requirement.
OPM also proposes clarifying that an employee would be required to have a break in service of at least 90 days from an appointment that is ineligible for recruitment incentives as provided in 5 CFR 575.104 even if the appointment is otherwise covered by an exception in the definition of “newly appointed” in 5 CFR 575.102. For example, as proposed, an SES limited term appointee or limited emergency appointee when the appointment must be cleared through the White House Office of Presidential Personnel would be required to have at least a 90-day break in service before becoming eligible for a recruitment incentive, but an SES limited term appointee or limited emergency appointee when the appointment does not need to be cleared through the White House Office of Presidential Personnel would not be required to have at least a 90-day break in service before becoming eligible for a recruitment incentive. OPM also proposes making similar revisions to the superior qualifications and special needs pay-setting authority regulations in 5 CFR 531.212(a)(3).
Section 101(c) of the Federal Workforce Flexibility Act of 2004 (Pub. L. 108-411, October 30, 2004) required OPM to submit an annual report to the Committee on Governmental Affairs of the Senate and the Committee on Government Reform in the House of Representatives on the operation of the 3Rs authorities for each of the first 5 years in which the amended authorities were in effect (i.e., 2005 to 2009). Sections 575.113(b), 575.213(b), 575.313(b), and 575.315(i) require agencies to submit specific information and data to OPM for this annual report. While OPM will no longer be required to submit a report to Congress on agencies’ use of the 3Rs authorities in calendar year 2010 and subsequent calendar years, OPM has found the annual report to be very informative concerning Governmentwide use of the 3Rs. We also learned in the interagency work group that met in August 2009 that the 3Rs report may help agencies understand the nature and trends of their own 3Rs use. OPM is also able to compare the data agencies report to OPM for the report to Congress to the data agencies report to OPM’s central data systems under 5 CFR 9.2 and follow up with agencies concerning the accuracy of the data. Therefore, OPM proposes to amend sections 575.113(b), 575.213(b), 575.313(b), and 575.314(i) (as redesignated in these proposed regulations) to remove references to OPM’s report to Congress and provide that OPM may require that each agency submit a report to OPM on its use of incentives in the previous calendar year. The proposed regulations would also allow OPM to exempt an agency (or part of an agency) from all or any part of any reporting requirement if OPM has determined that the incentive data submitted to OPM’s central data systems under 5 CFR 9.2 is accurate and sufficient for our Governmentwide role of monitoring and administering the 3Rs.