5 U.S.C. § 5754 — Retention bonuses
submitted 22 years ago by Pub. L. 108-411 to r/title-5-GOVERNMENT-ORGANIZATION-AND-EMPLOYEES · 935 words · no verdicts yet
The Office of Personnel Management may authorize retention bonuses for employees whose skills are essential and who would likely leave without a bonus. The section covers individual and group bonuses, requires plans or agreements, limits rates, and permits higher rates for critical needs.
(a)(1) This section may apply to General Schedule employees and OPM-approved categories requested by an Executive agency head. (2) It excludes the presidential/Senate-confirmed positions, Senior Executive Service noncareer positions, and confidential or policy positions listed in section 5753(a)(2). (3) “Employee” has section 2105’s meaning and also includes section 2105(c) employees. This section does not define that referenced term.
(b) OPM may authorize an agency head to pay an employee a retention bonus if (1) unusually high or unique qualifications, or a special agency need, makes retaining the employee essential and (2) without the bonus the employee would likely leave Federal service or take another federal position under OPM-described conditions.
(c) OPM may authorize bonuses for a group in one or more position categories and geographic areas if subsection (b)(1) is met and there is a high risk that a significant part of the group would leave without bonuses.
(d)(1) A retention bonus generally requires a written agreement to complete a period of agency employment. (2) The agreement must state the service length, amount, payment method, and other lawful terms, including early-termination conditions and effects. (3)(A) No agreement is needed if the agency pays biweekly at the full established percentage with nothing deferred. (B) If the agency decides to stop those payments, it must give written notice; unless OPM regulations say otherwise, payments continue through the pay period when notice is given. (4) A retention bonus cannot be based on service that is the basis for a section 5753 recruitment or relocation bonus.
(e)(1) Stated as a percentage of basic pay for the related service period, a bonus cannot exceed 25 percent for an individual bonus under (b), or 10 percent for a group bonus under (c), unless (f) applies. (2)(A) It may be paid in installments after specified service periods or as one lump sum at the end. (B) Each installment equals basic pay earned in that period multiplied by a percentage no higher than the established bonus rate. (C) If installment payments use a lower percentage, the unpaid accrued amount is paid in the final installment after full service. (D) The established rate is the rate under paragraph (1) or subsection (f). (3) The bonus is not basic pay.
(f) At an agency head’s request, OPM may waive the limit and allow up to 50 percent of basic pay for an otherwise eligible employee or category, based on critical agency need.
(g) Before paying bonuses, the agency must establish a payment plan under OPM regulations.
(h) OPM may issue implementing regulations.
This section may be applied to—
employees covered by the General Schedule pay system established under subchapter III of chapter 53; and
employees in a category approved by the Office of Personnel Management at the request of the head of an Executive agency.
A bonus may not be paid under this section to an individual who is appointed to or who holds—
a position to which an individual is appointed by the President, by and with the advice and consent of the Senate, excluding members of the Foreign Service other than chiefs of mission and ambassadors at large;
a position in the Senior Executive Service as a noncareer appointee (as such term is defined under section 3132(a)); or
a position which has been excepted from the competitive service by reason of its confidential, policy-determining, policy-making, or policy-advocating character.
In this section, the term “employee” has the meaning given that term in section 2105, except that such term also includes an employee described in subsection (c) of that section.
The Office of Personnel Management may authorize the head of an agency to pay a retention bonus to an employee if—
the unusually high or unique qualifications of the employee or a special need of the agency for the employee’s services makes it essential to retain the employee; and
the agency determines that, in the absence of a retention bonus, the employee would be likely to leave—
the Federal service; or
for a different position in the Federal service under conditions described in regulations of the Office.
The Office may authorize the head of an agency to pay retention bonuses to a group of employees in 1 or more categories of positions in 1 or more geographic areas, subject to the requirements of subsection (b)(1) and regulations prescribed by the Office, if there is a high risk that a significant portion of employees in the group would be likely to leave in the absence of retention bonuses.
Payment of a retention bonus is contingent upon the employee entering into a written service agreement with the agency to complete a period of employment with the agency.
The agreement shall include—
the length of the required service period;
the amount of the bonus;
the method of payment; and
other terms and conditions under which the bonus is payable, subject to the requirements of this section and regulations of the Office.
The terms and conditions for paying a bonus, as specified in the service agreement, shall include—
the conditions under which the agreement may be terminated before the agreed-upon service period has been completed; and
the effect of the termination.
Notwithstanding paragraph (1), a written service agreement is not required if the agency pays a retention bonus in biweekly installments and sets the installment payment at the full bonus percentage rate established for the employee with no portion of the bonus deferred.
If an agency pays a retention bonus in accordance with subparagraph (A) and makes a determination to terminate the payments, the agency shall provide written notice to the employee of that determination. Except as provided in regulations of the Office, the employee shall continue to be paid the retention bonus through the end of the pay period in which such written notice is provided.
A retention bonus for an employee may not be based on any period of such service which is the basis for a recruitment or relocation bonus under section 5753.
Except as provided in subsection (f), a retention bonus, which shall be stated as a percentage of the employee’s basic pay for the service period associated with the bonus, may not exceed—
25 percent of the employee’s basic pay if paid under subsection (b); or
10 percent of an employee’s basic pay if paid under subsection (c).
A retention bonus may be paid to an employee in installments after completion of specified periods of service or in a single lump sum at the end of the full period of service required by the agreement.
An installment payment is derived by multiplying the amount of basic pay earned in the installment period by a percentage not to exceed the bonus percentage rate established for the employee.
If the installment payment percentage established for the employee is less than the bonus percentage rate established for the employee, the accrued but unpaid portion of the bonus is payable as part of the final installment payment to the employee after completion of the full service period under the terms of the service agreement.
For purposes of this paragraph, the bonus percentage rate established for an employee means the bonus percentage rate established for such employee in accordance with paragraph (1) or subsection (f), as the case may be.
A retention bonus is not part of the basic pay of an employee for any purpose.
Upon the request of the head of an agency, the Office may waive the limit established under subsection (e)(1) and permit the agency head to pay an otherwise eligible employee or category of employees retention bonuses of up to 50 percent of basic pay, based on a critical agency need.
The Office shall require that, before paying any bonuses under this section, an agency shall establish a plan for the payment of any such bonuses, subject to regulations prescribed by the Office.
The Office may prescribe regulations to carry out this section.
Source credit: (Added Pub. L. 108–411, title I, § 101(a)(1), Oct. 30, 2004, 118 Stat. 2307; amended Pub. L. 114–323, title IV, § 412(2), Dec. 16, 2016, 130 Stat. 1932.)
- 2004Enacted · Pub. L. 108-411 · 118 Stat. 2307
- 2016Amended · Pub. L. 114-323 · 130 Stat. 1932
A history note hasn’t been published yet. The record shows enactment by Pub. L. 108-411 on 2004-10-30.
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