Pay to Stay

There are three Rs in the federal workplace that spell extra earnings potential for employees: recruitment, retention and relocation.

In each area agencies can offer employees bonuses to help meet staffing needs. Who is eligible for the awards and how big can they be? Individual agencies make their own arrangements on a case-by-case basis, but as with almost everything in the federal arena, there are boundaries and regulations.

The Office of Personnel Management, which administers pay and benefits regulations for the government, issued a new set of Q&As last week to clarify the rules.

Assuming you're already a federal employee and not looking to change locations, retention bonuses may be the most intriguing. OPM defines retention bonuses as "an incentive an agency may pay to a current employee if the agency determines that the unusually high or unique qualifications of the employee or a special need of the agency for the employee's services make it essential to retain the employee."

Most employees would like to describe themselves as uniquely qualified and essential, but OPM provides specific factors that agencies must take into account when deciding to use the authority:

• Labor market, including the availability of candidates who could replace you with minimal training.
• Success of recent recruitment efforts for similar positions.
• Desirability of the job, including work environment and geographic location.
• Salaries typically paid outside the federal government for comparable jobs.
• Importance of the job in achieving the agency's mission.

Agencies can pay retention bonuses to individuals or to a category of employees, which can be defined by grade level, assignment to a special project or location.

An agency official who is at least one level higher than the employee slated to receive the incentive must approve the award. The agency must document, in writing, the basis for singling out the employee or employee group as essential, as well as the individual's or group's likelihood of leaving federal service.

Workers who are awarded a retention bonus can receive up to 25 percent of their base pay. When an entire category of employees is chosen, the ceiling is 10 percent. With OPM approval, however, the cap can be raised to 50 percent for both groups. OPM grants that exception if it determines the agency has a critical need.

The extra money can be doled out in a lump sum after completion of an agreed upon period of service, or by installments in synch with the pay periods. OPM advises agencies that a service agreement is required in most cases for retention bonuses. That agreement should include dates of the service period, for which there is no set time requirement.