Relocation, Retention and Recruitment Incentive
Reference Number: NFC-24-1715950611
Published: August 12, 2024
Effective: Pay Period 16, 2024
Summary
This bulletin replaces Bulletin 06-4A, Relocation, Retention, and Recruitment Incentives, dated April 26, 2006.
On October 30, 2004, the Federal Workforce Flexibility Act (Public Law 108-411) was signed. Title I, Section 101, covered changes to recruitment, relocation, and retention incentives (3Rs). Current guidance for recruitment incentives is found in CPM-2018-04, New Recruitment, Relocation and Retention Incentive Waiver Request Templates and Updated Calculations Fact Sheets.
The information in this bulletin is not intended to be all-inclusive and is to be used in conjunction with Office of Personnel Management (OPM) guidance and regulations contained in Title 5 of the Code of Federal Regulations (CFR).
Implementation
The payment of the 3Rs in the National Finance Center (NFC) Payroll/Personnel System (PPS) is based on requirements for employees appointed to a General Schedule (GS), senior-level (SL), scientific or professional (ST), Senior Executive Service (SES), Federal Bureau of Investigation and Drug Enforcement Administration (FBI/DEA) SES, Executive Schedule (EX), law enforcement officer, or prevailing rate positions.
NOTE: To ensure correct payments, and prior to processing any incentives, Agencies must obtain OPM approval and submit requirements to NFC for all other positions/pay plans.
Recruitment
An Agency may pay a recruitment incentive to a newly appointed employee if the Agency has determined that the position is likely to be difficult to fill in the absence of an incentive. This determination must be made on an individual, case-by-case basis before the employee enters on duty. An Agency may target groups of positions and make this determination on a group basis. The following guidelines apply to recruitment incentive:
- The recruitment incentive is paid as a lump sum which is computed based on the employee’s adjusted salary.
- For employees on pay retention (J, K, U, V, 3, or R), the adjusted salary is not used in the computation. For these employees, the incentive is computed on step 10 of the employee’s current grade on the locality pay table or the special salary rate table, whichever is highest.
- The recruitment incentive may not exceed 25 percent of an employee’s adjusted salary (including locality pay or special rate supplement) in effect at the beginning of the service period multiplied by the number of years in the service period (not to exceed four years). With OPM approval, the payment may be increased not to exceed 50 percent of the employee’s adjusted salary (including locality pay or special rate supplement) at the beginning of the service period multiplied by the number of years in the service period. Under no circumstances may the total recruitment incentive received exceed 100 percent of the employee’s adjusted salary at the beginning of the service period.
- The incentive may be paid as an initial lump-sum payment, in installments throughout the service period, as a final lump-sum payment upon completion of the service period, or in a combination of these methods.
- Political appointees (Presidential appointees, noncareer SES, and Schedule C employees) are not eligible to receive a recruitment incentive.
Relocation
An Agency may pay a relocation incentive to a current employee who must relocate to accept a position in a different geographic area if the Agency determines that the position is likely to be difficult to fill in the absence of an incentive. The following guidelines apply to relocation incentive:
- The relocation incentive is paid as a lump sum which is computed based on the employee’s adjusted salary.
- For employees on pay retention (J, K, U, V, 3, or R), the adjusted salary is not used in the computation. For these employees, the relocation incentive is computed on step 10 of the employee’s current grade on the locality pay table or the special salary rate table, whichever is higher.
- The relocation incentive may not exceed 25 percent of an employee’s adjusted salary (including locality pay or special rate supplement) in effect at the beginning of the service period multiplied by the number of years in the service period (not to exceed four years). With OPM approval, the payment may be increased not to exceed 50 percent of the employee’s adjusted salary (including locality pay or special rate supplement) at the beginning of the service period multiplied by the number of years in the service period. Under no circumstances may the total recruitment incentive received exceed 100 percent of the employee’s adjusted salary at the beginning of the service period.
- The incentive may be paid as an initial lump-sum payment at the beginning of the service period, in installments throughout the service period, as a final lump-sum payment upon completion of the service period or in a combination of these methods.
- The employee receiving the relocation incentive must have a fully successful or higher performance rating.
- Political appointees (Presidential appointees, Noncareer SES, and Schedule C employees) are not eligible to receive a relocation incentive.
Retention
An Agency may pay a retention incentive 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 and that the employee would be likely to leave the Federal service in the absence of a retention incentive. The following guidelines apply to retention incentive:
- The retention incentive is paid as a lump sum which is computed based on the employee’s adjusted salary.
- For employees on pay retention (J, K, U, V, 3, or R), the adjusted salary is not used in the computation. For these employees, the incentive is computed on step 10 of the employee’s current grade on the locality pay table or the special salary rate table, whichever is higher.
- The retention incentive may not exceed 25 percent of an employee’s adjusted salary (including locality pay or special rate supplement) in effect at the beginning of the service period multiplied by the number of years in the service period. With OPM approval, the payment may be increased not to exceed 50 percent of the employee’s adjusted salary (including locality pay or special rate supplement) at the beginning of the service period multiplied by the number of years in the service period.
- The retention incentive is paid in installments after the completion of specified periods of service during the full service period (biweekly, monthly, quarterly, etc.); or as a single lump-sum payment after the completion of the full period of service required by a service agreement.
- An agency may not pay a retention incentive as an initial lump-sum payment at the start of a service period or in advance of fulfilling the service or installment period for which the incentive is being paid.
- The employee receiving the retention incentive must have a fully successful or higher performance rating.
- Political appointees (Presidential appointees, Noncareer SES, and Schedule C employees) are not eligible to receive a retention incentive.
Personnel Document Processing Instructions
Information on processing the 3Rs can be found on OPM’s website. The table below includes information for processing the 3Rs.
| Incentive | Result | Nature of Action Code (NOAC) | Authority Code | Authority |
|---|---|---|---|---|
| Recruitment | Incentive must be less than or equal to 25% of the adjusted salary. | 815 | VPF | 5 U.S.C. 5753 |
| Recruitment | Incentive is greater than 25% of the adjusted salary (critical agency need). | 815 | VPO | 5 U.S.C. 5753(e) |
| Recruitment | Incentive is terminated and the percentage equals zero. | 815 | VPT | Agency must cite the law, Executive Order or regulation that authorizes the action. |
| Relocation | Incentive must be less than or equal to 25% of the adjusted salary. | 816 | VPF | 5 U.S.C. 5753 |
| Relocation | Incentive is greater than 25% of the adjusted salary (critical agency need). | 816 | VPO | 5 U.S.C. 5753(e) |
| Relocation | Incentive is terminated and the percentage equals zero. | 816 | VPW | Agency must cite the law, Executive Order or regulation that authorizes the action. |
| Retention | The employee receives biweekly lump sum payments in equal percentage and no service agreement is required. The incentive is 25% or less for individuals and 10% or less for a group. | 827 | VPN | Reg 5754(d)(3)(A) |
| Retention | The receipt of biweekly lump sum payments in equal percentage with no service agreement is terminated. | 827 | VPX | Reg 575.311 |
| Retention | The employee receives retention incentive when a service agreement is required, and employee is likely to leave Federal service. The incentive is 25% or less for individuals and 10% or less for a group. | 827 | VPR | 5 U.S.C.5754(e) |
| Retention | The employee receives retention incentive when a service agreement is required, and employee is likely to leave Federal service. Incentive is greater than 25% for individuals and greater than 10% for a group (critical agency need). | 827 | VPS | 5 U.S.C.5754(f) |
| Retention | Receipt of retention incentive when a service agreement is required, and employee is likely to leave Federal service is terminated. | 827 | VPY | Reg 575.311 |
| Retention | The employee receives retention incentive when a service agreement is required, and employee is likely to leave for a different position in the Federal Service. Incentive is 25% or less for an individual or 10% or less for a group. | 827 | VPA | Reg.575.314 |
| Retention | The employee receives a retention incentive when a service agreement is required, and employee is likely to leave for a different position in the Federal Service. Incentive is above 25% for an individual or above 10% for a group (critical Agency need). | 827 | VPB | Reg.575.314 |
| Retention | The employee receives a retention incentive when a service agreement is required, and employee is likely to leave for a different position in the Federal Service is terminated. | 827 | VPC | Reg. 575.314(g) |
Note: There are no OPM requirements for corrections or cancellations of NOAC 827, Retention. When a retention incentive is incorrect or erroneously processed, the Agency must process NOAC 827 with the appropriate legal authority code to terminate the incentive. The Agency must then process actual payouts for underpayments or establish a debt for overpayments via the Web-based Special Payroll Processing System (SPPS Web) or the manual pay process. The Agency may also restart retention incentives paid on a biweekly lump sum basis with a correct percentage by processing an additional NOAC 827 with the appropriate authority code.
To Process Recruitment and Relocation Incentives:
There are situations wherein the personnel action for these incentives should not generate a lump sum payment. To process an incentive without a payment, include the appropriate NOAC, legal authority and Remark Code 288 / HR Use Only-Retro Payment and/or Revalidation Suppressed. The inclusion of Remark Code 288 will suppress the payment of a lump sum.
- The processing of Recruitment Incentive (NOAC 815) only generates a one-time, lump-sum payment. Agencies that wish to pay in other increments must process the NOAC 815 for the total amount with the Remark Code 288 for documentation purposes only. The Agency must then process actual payouts via SPPS Web or the manual pay process.
The processing of Relocation Incentive (NOAC 816) only generates a one-time, lump-sum payment. Agencies that wish to pay in other increments must process the NOAC 816 for the total amount with the Remark Code 288 for documentation purposes only. The Agency must then process actual payouts via SPPS Web or the manual pay process.
To Process Retention Incentives:
The processing of Retention Incentive (NOAC 827) generates biweekly lump sum payments in equal percentage. Agencies that wish to pay in other increments must pay the employee via SPPS Web or the manual pay process. The Earnings and Leave Statement serves as the employee notification and replaces the need for an SF 50. The Agency may also send written notifications to the employees.
Web-based Entry, Processing, Inquiry, and Correction System (EPIC Web)
In EPIC Web, incentives are processed in the Bonus/Incentives folder.
EmpowHR
In EmpowHR, incentives are processed under Personnel Action Request (PAR) Processing on the Bonus page.
Resources
The applicable procedure manuals are available online on the NFC website. To view and/or print this procedure, select HR and Payroll Clients from the MyNFC drop-down menu on the NFC Home page. At the HR and Payroll Clients page, select the Publications tab and select NFC System Documentation to access the procedure manual.
Inquiries
For questions about NFC processing, authorized Servicing Personnel Office representatives should contact the NFC Contact Center at1-855-NFC-4GOV (1-855-632-4468)or via the customer service portal atServiceNow Portal for Federated Users and at ServiceNow Portal for Non-Federated Users.