6.550.1  Pay Administration

6.550.1.1  (12-10-2009)
Pay Administration under Title 5 and the FLSA - General Provisions

  1. This section provides guidance for pay administration as provided under Title 5 and the FLSA. These provisions, which are codified in 5 CFR parts 550 and 551, apply to each IRS employee, except those identified below:

    1. An employee covered by the Federal Wage System;

    2. An employee outside the continental United States or in Alaska who is paid in accordance with local prevailing wage rates for the areas in which employed; or

    3. A member of the Senior Executive Service (SES).

  2. It is important to know which set of overtime rules (FLSA or Title 5) cover individual employees. The actual duties an employee performs, which are documented in the position description, determine whether an employee is non-exempt (covered) or exempt (not covered) under the provisions of the FLSA. FLSA coverage is stated on the employee's Standard Form (SF) 50, box 35, as N (non-exempt) or E (exempt).

  3. While Title 5 rules (as codified by 5 CFR 550) do not cover non-exempt employees for overtime pay, they do cover both exempt and non-exempt employees with regard to all other aspects of pay administration, including night pay, holiday pay, Sunday work, severance pay, religious compensatory time, and compensatory time off for travel.

  4. The IRS is responsible for determining whether employees are covered under the provisions of the FLSA. The criteria for coverage are contained in 5 CFR 551, subpart B.

  5. Definitions: The definitions at 5 CFR 550.103 (for Title 5) and 5 CFR 551.104 (for FLSA) apply for this section.

6.550.1.1.1  (12-10-2009)
Coverage under the FLSA

  1. The coverage status of an employee under the FLSA is based on a review of the duties performed against the criteria stated in 5 CFR 551, subpart B. Determination of this status is part of the classification process.

    1. Employees are presumed to be covered under the FLSA; i.e., FLSA-nonexempt, unless the IRS determines that the employee clearly meets the exemption criteria.

    2. The burden of proof rests with the agency that asserts the exemption.

    3. FLSA determinations have no direct relationship to bargaining unit status.

6.550.1.1.2  (12-10-2009)
Effect of Temporary and Emergency Work on FLSA Coverage

  1. Effect of performing temporary work or duties on FLSA exemption status:

    1. This guidance and the provisions at 5 CFR 551.211 apply when an employee must temporarily perform work or duties that are not consistent with the primary duties of the job for an extended period, that is, for more than 30 consecutive calendar days.

    2. "Primary duty" typically means the duty that constitutes the major part (over 50 percent) of an employee's work (5 CFR 551.104). However, a duty constituting less than 50 percent of an employee's work may be credited as the primary duty for exemption purposes if that duty:

      1. Constitutes a substantial, regular part of the work assigned and performed;

      2. Is the reason for the existence of the position; and

      3. Is clearly exempt work in terms of the basic nature of the work, the frequency with which the employee must exercise discretion and independent judgment, and the significance of the decisions made.

    3. Except in the case of an emergency (see (4) below), an employee's exemption status should not change based on a snapshot of his or her work, but rather on an assessment of the temporary duties over a reasonable period of time (the 30-day test).

  2. Effect on non-exempt employees:

    1. A non-exempt employee who temporarily performs work different than his or her primary duties remains non-exempt for the entire period of the detail unless the employee's primary duties for the period of the temporary work are exempt and performed consistently for more than 30 consecutive calendar days. This rule applies regardless of a change in geographic location.

    2. When the provisions above have been met, the non-exempt employee becomes exempt for the entire period of the work or duties. IRS must recalculate the employee's total pay retroactive to the beginning of the period because the employee is not entitled to FLSA overtime but may be owed Title 5 overtime pay.

  3. Effect on exempt employees:

    1. An exempt employee who temporarily performs work different than his/her primary duties remains exempt for the entire period of the detail unless the employee's primary duties for the period of temporary work are FLSA-covered and performed consistently for more than 30 consecutive calendar days.

    2. When the provisions above have been met, the exempt employee becomes non-exempt for the entire period of the work or duties. IRS must recalculate the employee's total pay retroactive to the beginning of the period because the employee is not entitled to Title 5 overtime pay but may be owed overtime pay under the FLSA.

  4. In emergency situations where human life, safety, or property is threatened, and/or operations of an activity could be disrupted, and employees are assigned to temporary work in connection with that emergency:

    1. Non-exempt employees remain non-exempt regardless of the duties performed.

    2. Exempt employees' status is determined on a workweek basis. An exempt employee remains exempt for any workweek in which the employee's primary duties are defined as exempt; an exempt employee becomes non-exempt for any workweek in which the employee's primary duties for the period of the emergency are FLSA-covered as defined in this section.

  5. Temporary changes to an employee's primary duties beyond 30 days that affect an employee's FLSA status (as described in paragraphs (2) and (3) above) must be documented through a Personnel Action Request (PAR) as a detail and reflected via Single Entry Time Reporting (SETR). Contact your organization's SETR representative for specific instructions.

6.550.1.1.3  (12-10-2009)
Maximum Earnings Limitations

  1. The maximum biweekly and annual earnings limitations described below apply to all employees covered under this IRM chapter, except as follows: Per 5 CFR 551.501(d), maximum earnings limitations do not apply to overtime pay for FLSA non-exempt employees.

  2. Biweekly maximum earnings limitation:

    1. Except as provided in b) below, an employee may be paid premium pay under this subpart only to the extent that the payment does not cause the total of his or her basic pay and premium pay for any pay period to exceed the greater of the biweekly rate for either a GS-15, step 10 (including any applicable locality payment or special rate supplement) or the rate payable for level V of the Executive Schedule.

    2. This paragraph does not apply to any pay period during which an employee performs work in connection with an emergency or mission-critical work as discussed in 3) below.

    3. The biweekly rate discussed in a) above is computed as follows:

      1. Compute an hourly rate by dividing the applicable annual rate of basic pay by 2,087 hours and rounding the result to the nearest cent.

      2. Compute the biweekly rate by multiplying the hourly rate by 80 hours.

  3. Annual maximum earnings limitation for work in connection with an emergency or work critical to the mission of the IRS:

    1. For any pay period in which an appropriate authority, as defined at 5 CFR 550.106, determines that an emergency or mission-critical work exists, an employee performing work in connection with the emergency shall be paid premium pay under the annual limitation described in c) below. The Department of the Treasury is the appropriate authority for determination of an emergency; the Commissioner is delegated the authority to determine mission-critical work (reference June 27, 2002, Treasury Memorandum, Subject: Delegations and Guidance for Limitations on Premium Pay.

    2. The determination under a) above should be implemented as soon as practicable. Premium pay under the annual limitation shall be effective on the first day of the pay period in which the emergency or mission-critical work began.

    3. In any calendar year during which an employee has performed work in connection with an emergency or mission-critical work, he or she shall be paid premium pay to the extent that the payment does not cause the total of annual basic pay and premium pay to exceed the greater of either the maximum rate for GS-15 in effect on the last day of the calendar year, including a locality-based comparability payment or a special rate supplement, or the rate payable for level V of the Executive Schedule on the last day of the calendar year.

6.550.1.1.4  (12-10-2009)
Overtime General Provisions

  1. The FLSA and Title 5 provide statutory guidance in determining the applicability and computation of employees’ overtime payments and compensatory time off in lieu of overtime payment.

  2. Employees who work full-time, part-time, or intermittent tours of duty are eligible for overtime pay.

  3. Except as provided below, overtime work means work in excess of 8 hours in a day or in excess of 40 hours in an administrative workweek that is officially ordered or approved in writing, and performed by an employee.

    1. For part-time employees, overtime hours are hours officially ordered in excess of 8 hours in a day or 40 hours in a workweek, regardless of the basic work requirement. Time outside a part-time employee's scheduled tour of duty, but not in excess of 8 hours in a day or 40 hours in a week, are non-overtime hours of work compensated at the employee's rate of basic pay.

    2. For employees on a flexible work schedule, overtime is all work time officially ordered in advance that is in excess of 8 hours in a day, or 40 hours in a week, or 80 hours in a biweekly pay period.

    3. Credit hours are worked at the request of the employee and are not overtime hours.

    4. For full-time employees on compressed work schedules (5-4/9 and 4/10), overtime hours are all hours officially ordered and approved in excess of the compressed work schedule; e.g., an employee on a 4/10 schedule who is ordered to work 1 hour of overtime will work 11 hours on that workday. For part-time employees, overtime hours are hours in excess of the compressed work schedule for a day (but must be more than 8 hours) or for a week (but must be more than 40 hours).

  4. Overtime work is scheduled and credited in 15-minute increments and is rounded up or down to the nearest 15-minute increment.

  5. The overtime rate for an employee performing overtime work at night, on a Sunday, or on a holiday is the same rate as for any other time.

  6. Overtime for criminal investigators receiving law enforcement availability pay (LEAP) is covered under 5 CFR 550.181-187. See IRM 6.550.1.1.17.

  7. Reference the following link http://apm.web.irs.gov/WII/wiiOvertimeCompTime.htm or See Exhibit 6.550.1-1. at the end of this document for a table that outlines the key components of overtime and compensatory time for FLSA exempt and non-exempt employees.

6.550.1.1.5  (12-10-2009)
Authorization of Overtime Pay

  1. Under Delegation Order 255 dated October 23, 1988, the authority to order or approve the performance of overtime and work on holidays, and to order or approve the performance of overtime duty for which compensatory time off will be granted in lieu of overtime pay, is delegated to no lower than second-level managers.

  2. Officials authorized to order or approve the performance of overtime duty will be guided by the principle that overtime, whether on a paid or compensatory time off basis, shall be ordered or approved only when necessary to accomplish the mission of the IRS, and when funds are available.

  3. Overtime work must be officially ordered or approved in writing by an authorized official as noted in (1) above. The written order and approval must be maintained by the business unit in accordance with records retention requirements for time and attendance records. Business units are required to establish their own internal procedures and documents for requesting and approving overtime, and for maintaining those records.

  4. For FLSA non-exempt employees: Hours of work include any work that is "suffered or permitted," including work performed that is not officially authorized or approved, provided the employee’s management knows that work is being performed and has an opportunity to prevent the work from being performed. Waiting or idle time which is under control of the IRS, and which is for its benefit, is also considered hours of work.

    1. Employees on flexitour schedules with credit hours may not earn overtime as a result of including "suffered or permitted" hours as hours of work.

6.550.1.1.6  (12-10-2009)
Determining Hours of Work

  1. Time spent in preshift or postshift activities that is closely related to an employee’s principal activities and is indispensable to the performance of those activities is credited as hours of work if the total time spent is more than 10 minutes.

  2. Time spent in a paid nonwork status, including holidays, paid leave, and compensatory time off, is deemed hours of work and does not reduce the amount of overtime pay to which the employee may be entitled.

  3. Leave without pay is not deemed as hours of work, and an equal period of work performed outside the employee’s basic workweek must be substituted before any additional work performed is paid as overtime.

  4. Hours of night, Sunday, or holiday work are included in determining the total number of hours worked in an administrative workweek.

  5. Call-back overtime work is irregular or occasional overtime work performed on an employee’s day off, or for which he or she is required to return to the place of employment. The employee will be paid a minimum of 2 hours of overtime, regardless of the actual time worked.

  6. Stand-by duty is hours of work if, for work-related reasons, the employee is restricted to a designated post of duty and is assigned to be in a state of readiness to perform work, with limitations so substantial that the employee cannot use the time for personal purposes.

  7. On-call status is not hours of work if the employee carries an electronic device; i.e., a cell phone or beeper for the purpose of being contacted, even though the employee is required to remain within a reasonable call-back radius, or if he or she is allowed to make arrangements for another person to perform work that may arise during the on-call period.

  8. Time spent in other activities including training, handling grievances and performing representational functions, receiving medical attention, and performing charitable activities, is considered hours of work for FLSA non-exempt employees under the circumstances described at 5 CFR 551.423-426.

6.550.1.1.7  (12-10-2009)
Time Spent Traveling

  1. Home-to-work travel: Travel from home-to-work and work-to-home is not hours of work and is not compensable. Similarly, such travel may not serve to decrease the hours of work in the administratively scheduled workday or workweek. "Home-to work/work-to home" commuting includes travel between an employee's home and temporary duty location within the limits (50 mile radius) of the employee's official duty station. When an employee travels directly from home to a temporary duty location outside the limits of his or her official duty station, the time the employee would have spent in normal home-to-work travel shall be deducted from hours of work.

  2. When an employee is offered a mode of transportation but chooses to use an alternate mode, or travels at a different time than that selected by the agency, the employee will be credited with the lesser of:

    1. The actual travel time resulting in hours of work under this subsection; or

    2. The estimated travel time that would have been considered hours of work had the employee used the mode of transportation offered by the agency, or traveled at the time selected by the agency.

  3. An employee may be entitled to earn compensatory time off for travel outside regular duty hours when ordered and approved in advance of travel, if such travel is outside the employee’s official duty station, and when the time is not compensable under any other authorities. See section 6.550.1.10 for additional information on compensatory time off for travel.

  4. For FLSA exempt employees, as provided in 5 CFR 550.112, time in travel status away from the official duty station (travel more than 50 miles from the duty station using the most common route) is deemed employment if the travel:

    1. is within the regularly scheduled workweek; or

    2. meets one of these four conditions:

      1. involves performance of actual work while traveling; e.g., courier required to drive a delivery van in order to deliver mail;

      2. is incident to travel that involves the performance of work while traveling; e.g., courier driving an empty delivery van on return to duty station;

      3. is carried out under such arduous and unusual conditions that the travel is inseparable from work; e.g., travel on unusually adverse terrain or under severe weather conditions; or

      4. results from an event which could not be scheduled or controlled administratively by an agency in the executive branch of the Government (including the IRS); e.g., training scheduled solely by a private firm.

  5. For FLSA non-exempt employees, as provided in 5 CFR 551.422, time in travel status away from the official duty station (travel more than 50 miles from the duty station using the most common route) is deemed hours of work if the travel:

    1. is during regular working hours;

    2. requires the employee to drive a vehicle or perform other work while traveling;

    3. requires the employee to travel as a passenger on a 1-day trip (round trip) away from the permanent duty station; or

    4. requires the employee to travel on an overnight assignment away from the official duty station during hours on a nonworkday that correspond to the employee’s regular working hours.

  6. For travel on a holiday, see section 6.550.1.1.14(8).

6.550.1.1.8  (12-10-2009)
Computation of Overtime Pay for FLSA Exempt Employees

  1. Overtime under Title 5 will be calculated and paid as provided by 5 CFR 550.112 and 5 CFR 550.113. Basic provisions are as follows:

  2. The hourly rate of basic pay includes locality pay or special rates but excludes pay of any other kind (e.g., night differential, cost of living allowance).

  3. For an employee whose rate of basic pay does not exceed GS-10, step 1, the hourly overtime rate is 1 1/2 times his or her hourly rate of basic pay, including locality or special salary rate but exclusive of pay of any other kind (e.g., night differential, cost of living allowance).

  4. For each employee whose rate of basic pay exceeds the GS-10, step 1, the overtime hourly rate is the greater of 1 1/2 times the hourly rate of basic pay for GS-10, step 1, or the employee’s hourly rate of basic pay.

  5. The overtime rate for an employee performing overtime work at night, on a Sunday, or on a holiday is the same rate as for any other time; i.e., 1 1/2 times the hourly rate of basic pay.

  6. Use of leave without pay (LWOP) reduces the amount of overtime an employee may earn. See section 6.550.1.1.6(3).

  7. Use of paid leave does not reduce the amount of overtime pay to which the employee is entitled.

6.550.1.1.9  (12-10-2009)
Computation of Overtime Pay for FLSA Non-Exempt Employees

  1. Overtime under the FLSA will be calculated and paid as provided by 5 CFR 551, subpart E. Basic provisions are as follows:

  2. The hourly regular rate of basic pay includes locality pay or special salary rates but excludes pay of any other kind (e.g., night differential, cost of living allowance).

  3. Generally, employees shall receive overtime pay for all hours of work in excess of 8 in a day or 40 in a workweek at a rate equal to 1 1/2 times their hourly regular rate of pay.

  4. The maximum earnings limitations for overtime pay do not apply to employees covered under FLSA.

  5. The overtime rate for an employee performing overtime work at night, on a Sunday, or on a holiday is the same rate as for any other time; i.e., 1 1/2 times the hourly rate of basic pay.

  6. Use of LWOP reduces the amount of overtime an employee may earn. See section 6.550.1.1.6(3).

  7. Use of paid leave does not reduce the amount of overtime pay an employee may earn.

6.550.1.1.10  (12-10-2009)
Compensatory Time Off in Lieu of Overtime Pay for FLSA Exempt Employees

  1. As provided by 5 USC 5543 and 5 CFR 550.114, an employee may request and be granted compensatory time off from his or her regularly scheduled tour of duty instead of receiving overtime pay for an equal amount of irregular or occasional overtime work.

  2. Managers may require that FLSA-exempt employees whose rate of basic pay is above the rate for GS-10, step 10, be compensated with compensatory time off instead of overtime pay for irregular or occasional overtime work. (Non-exempt employees cannot be required to use compensatory time instead of receiving overtime pay.)

  3. Accumulation of compensatory time may not exceed 80 hours at any time and must be used within 26 pay periods after it is earned. Unused compensatory time off for exempt employees will be forfeited; however, if the employee meets one of the three criteria below, he or she will be paid for that unused compensatory time at the rate when it was earned:

    1. The failure to take the compensatory time off is due to an exigency of the Service, as determined by an SES member, and the use of that time was scheduled in writing before the 24th pay period after it was earned;

    2. The employee separates from Federal service or is placed in a LWOP status to perform service in the uniformed services;

    3. The employee separates from Federal service or is placed in a LWOP status because of an on-the-job injury with entitlement to injury compensation.

  4. Compensatory time must be used before annual leave as long as this does not result in the loss of any accumulated annual leave. If the use of the compensatory time would result in the forfeiture of annual leave, then annual leave may be used.

  5. Compensatory time is earned and used in 15-minute increments.

  6. The value of earned compensatory time off is included in applying the premium pay cap. Thus, exempt employees may not earn compensatory time off by working overtime hours to avoid the biweekly premium pay cap.

  7. SES employees are not eligible for compensatory time off.

6.550.1.1.11  (12-10-2009)
Compensatory Time Off in Lieu of Overtime Pay for FLSA Non-Exempt Employees

  1. FLSA nonexempt employees may never be required to accept compensatory time in lieu of overtime pay under any circumstances. However, they may voluntarily request compensatory time in lieu of overtime pay.

  2. Accumulation of compensatory time may not exceed 80 hours at any time, and it must be used within 26 pay periods after it is earned.

  3. Employees covered under FLSA must be paid for any unused regular compensatory time earned if they do not use it within prescribed time limits (26 pay periods) at 1 1/2 times their hourly rate at the time it was earned.

  4. Compensatory time must be used before annual leave as long as this does not result in the loss of any accumulated annual leave. If the use of the compensatory time would result in the forfeiture of annual leave, then annual leave may be used.

  5. Compensatory time is earned and used in 15-minute increments.

6.550.1.1.12  (12-10-2009)
FLSA Claims and Compliance

  1. Statute of limitations: Section 255a of Title 29, USC, imposes a 2-year statute of limitations, except in cases of willful violation where the statute of limitations is 3 years, for all claims under the FLSA.

  2. Avenues of review:

    1. As provided by 5 CFR 551.703 for bargaining unit employees, any claims must be filed using the negotiated grievance procedure as the exclusive administrative remedy for all claims under the FLSA. There is no right to further administrative review by the IRS or the Office of Personnel Management (OPM).

    2. A non-bargaining unit claimant may file a claim during the claim period with the IRS via an Employee Resource Center (ERC) ticket or with OPM (OPM Classification Appeals and FLSA Program, 1900 E Street, NW, Washington, DC 20415) but may not pursue both simultaneously.

    3. Claims must comply with the provisions of 5 CFR 551, subpart G.

6.550.1.1.13  (12-10-2009)
Night Pay Differential

  1. Authorization of night pay differential:

    1. Per 5 CFR 550.121, night work is regularly scheduled work performed by an employee between the hours of 6 p.m. and 6 a.m. An employee who performs night work is entitled to a differential of 10 percent of his or her rate of basic pay.

    2. An employee may not receive the night differential while in training, except as provided by 5 CFR 410.402.

  2. Computation of night pay differential:

    1. Absence on holidays or in travel status: An employee is entitled to a night pay differential when excused from night work on a holiday and for hours in an official travel status, whether performing actual duty or not.

    2. Absence of leave - 8-hour rule: An employee will receive a night pay differential for a period of paid annual (includes donated or leave bank leave) or sick leave only when the total amount of such leave, including both night and day hours, is less than 8 hours in a pay period.

      Note:

      Paid hours of absence charged to credit hours, compensatory time off, time off for religious observance, military leave, time-off award, court leave, excused absence, continuation of pay under the Federal Employees Compensation Act program, and other such paid absences do not count in calculating the 8-hours-of-paid-leave threshold limit.

    3. Relation to overtime, Sunday, and holiday pay: Night pay differential is in addition to overtime, Sunday, or holiday pay, and it is not included in the rate of basic pay used to compute the overtime, Sunday, or holiday pay.

    4. Credit hours: An employee may not receive night pay differential when earning or charging credit hours, under 5 USC 6122.

    5. Compensatory time off: An employee may not receive night pay differential when earning or taking compensatory time off as provided by 5 USC. 5543. However, an employee covered by a flexible work schedule who requests compensatory time off instead of overtime pay for regularly scheduled overtime work performed at night, under 5 USC. 6123, receives night pay differential for that regularly scheduled overtime work when it is performed, but does not receive night differential pay when the compensatory time off is taken.

    6. Temporary assignment to a different daily tour of duty: An employee is entitled to a night pay differential when he or she is temporarily assigned during the administrative workweek to a daily tour of duty that includes night work. This temporary change is distinguished from a period of irregular or occasional overtime work in addition to the employee’s regularly scheduled administrative workweek per 5 CFR 550.122(d).

  3. Night pay differential may be earned in 15-minute increments.

  4. Employees not serving on a scheduled tour of duty (intermittent) are not eligible for night differential pay.

  5. See table below to determine eligibility for night differential:

    Rule If the employee is receiving night shift differential and the employee is: Then, are you entitled to night shift differential?
    1 Temporarily assigned during the administrative workweek to a daytime daily tour which includes night work Yes, for those hours that fall between 6:00 p.m. and 6:00 a.m.
    2 Assigned to work regularly scheduled overtime work occurring at night Yes
    3 Is scheduled to attend a nighttime training class between 6 p.m. and 6 a.m. Yes
    4 Is scheduled to attend a training class during daytime hours No - 5 CFR 550.121
    5 Regularly scheduled for Sunday night work Yes, for those hours that fall between 6:00 p.m. and 6:00 a.m.
    6 Is absent due to a holiday or other non-workday Yes - 5 CFR 550.122(a)
    7 In official travel status regardless of whether you actually perform work Yes - 5 CFR 550.122(a)
    8 On a period of paid leave such as annual or sick leave Yes, if the amount of such leave (not counting military leave, court leave, or credit hours, etc.) including both night and day hours, is less than 8 hours in a pay period. (5 CFR 550.122(b). You will be paid in accordance with your normal tour of duty.
    No, if the total amount of such leave is 8 hours or more.
    9 Military leave, court leave, excused absence, religious compensatory time off, and time off award Yes - 27 Comp Gen 353; 49 Comp Gen 233; 5 CFR 550, subpart J
    10 Using credit hours and compensatory time off in lieu of overtime previously earned No - 5 USC. 5545(a)

6.550.1.1.14  (12-10-2009)
Pay for Holiday Work

  1. As provided by 5 USC. 5546(b) and 5 CFR 550.131, a full-time employee who is ordered to perform non-overtime work on a holiday is entitled to basic pay plus holiday premium pay at a rate equal to his or her rate of basic pay up to 8 hours; i.e., "double time." Employees must actually perform holiday work in order to receive holiday premium pay.

  2. Per 5 CFR 610.407, an employee on a compressed work schedule who performs work on a holiday is entitled to basic pay plus holiday premium pay at his or her rate of basic pay for the hours of work performed that are not in excess of the employee's compressed work schedule for that day (e.g., employee on a 4/10 schedule would be paid as noted up to 10 hours on the holiday).

  3. A part-time employee regularly scheduled to work on a holiday, and who is ordered to work on that day, is entitled to holiday premium pay for up to 8 hours.

  4. An intermittent employee who is ordered to work on a holiday is not entitled to holiday premium pay but is entitled to straight time pay for up to 8 hours worked on a holiday.

  5. An employee ordered to work on a holiday is entitled to at least 2 hours pay for holiday work.

  6. An employee who works overtime on a holiday is entitled to overtime pay at the normal overtime rate and not the holiday premium rate.

  7. An employee is not entitled to holiday premium pay while in training, unless the training takes place on a holiday and the employee would otherwise be performing regularly scheduled holiday work (5 CFR 410.402).

  8. An employee may not receive holiday premium pay for travel on a holiday unless that travel qualifies as hours of work as defined by 5 USC. 5542(b)(2):

    1. The travel involves the performance of work while traveling; e.g., courier required to drive a delivery van in order to deliver mail;

    2. The travel is incident to travel that involves the performance of work while traveling; e.g., courier driving an empty delivery van on return to duty station;

    3. The travel is carried out under arduous conditions; e.g., travel on unusually adverse terrain or under severe weather conditions; or

    4. The travel results from an event which could not be controlled administratively by an agency in the executive branch of the Government (including the IRS); e.g., training scheduled by a private firm.

  9. Employees on military or court leave are entitled to holiday premium pay if the holiday work was regularly scheduled and if the employee would have been required to work on that day.

  10. The authority to order and approve holiday work is delegated no lower than to second-level managers.

6.550.1.1.15  (12-10-2009)
Administratively Uncontrollable Work

  1. Annual premium pay for this purpose will be paid as provided by 5 USC. 5545(c)(2) and 5 CFR 550.151. However:

    1. An employee who receives law enforcement availability pay under 5 USC. 5545a and 5 CFR 550.181-187 may not receive pay under this paragraph.

  2. The authority to prescribe eligibility requirements and resolve questions concerning the payment of annual premium pay for administratively uncontrollable work and stand-by duty is delegated to the IRS Human Capital Officer. The authority may not be redelegated.

  3. The authority to approve payment of administratively uncontrollable work is delegated to:

    1. Division Commissioners; Deputy Division Commissioners; Chiefs; Deputy Chiefs; National Taxpayer Advocate; Deputy National Taxpayer Advocate for employees under their supervision and control; and

    2. National Headquarters Directors and Chiefs (and their Deputies) who report directly to the Commissioner, Deputy Commissioner, or Assistant Deputy Commissioner for employees under their supervision and control.

    3. This authority may not be redelegated.

6.550.1.1.16  (12-10-2009)
Pay for Sunday Work

  1. Employees are entitled to an additional 25 percent of their rate of basic pay for work performed during a regularly scheduled tour of duty that begins or ends on a Sunday. Sunday premium pay is not authorized for intermittent employees.

    Note:

    Per December 8, 2009 memorandum from OPM Director John Berry, part-time employees are eligible for Sunday premium pay (Fathauer v. United States)

  2. Sunday premium pay is not paid for overtime hours of work.

  3. Sunday premium pay may only be paid to employees who actually perform work on Sunday (i.e., no Sunday premium pay is awarded to employees on paid leave, holiday, military leave, court leave, excused absence, etc.).

  4. Employees who have two separate basic tours of duty on Sunday are entitled to Sunday premium pay for work performed on each tour of duty, e.g., if an employee works 8 hours during a basic tour of duty that begins on Saturday and ends on Sunday, and also works 8 hours during a basic tour of duty that begins on the same Sunday and ends on Monday, the employee is entitled to 16 hours of Sunday premium pay.

  5. Sunday premium pay is in addition to premium pay for holiday work, or night differential pay. Each entitlement to premium pay is computed separately as a premium pay percentage of an employee’s rate of basic pay.

  6. An employee is generally not entitled to Sunday premium pay while engaged in training. Exceptions to the general rule are listed at 5 CFR 410.402(b).

  7. Employees are charged 1 hour of annual leave if they work only 7 hours on Sunday due to the commencement of daylight saving time.

6.550.1.1.17  (12-10-2009)
Law Enforcement Availability Pay

  1. Each employee who meets the definition of criminal investigator at 5 CFR 550.103 and who fulfills the conditions and requirements of 5 USC. 5545a and 5 CFR 550.181-187, must receive availability pay as compensation for unscheduled duty in excess of the 40-hour workweek based on the needs of the IRS. Such payment will be administered as provided by the laws and regulations indicated in this paragraph and IRM 9.11.4.9.

  2. The authority to certify that a criminal investigator is available to perform irregular and unscheduled duty and receive availability pay is delegated to the Deputy Chief of the Criminal Investigation Division. The authority may be redelegated to no lower than first-level supervisors of criminal investigators.

6.550.1.2  (12-10-2009)
Allotments and Assignments from Federal Employees

  1. The definitions used in the following provisions are the same as those at 5 CFR 550.301 Definitions.

6.550.1.2.1  (12-10-2009)
Allotments and Assignments - General Provisions

  1. Under the provisions at 5 USC. 5525 and 5 CFR part 550, subpart C, employees may make payroll allotments for the following purposes:

    1. For dues to a labor organization under 5 USC. 7115;

    2. For dues to an association of management officials and/or supervisors under 5 CFR 550.331;

    3. For charitable contributions to a Combined Federal Campaign under 5 CFR 550.341;

    4. For income tax withholding under 5 CFR 550.351;

    5. Allotments to an employee's personal account(s) at a financial organization;

    6. For child support and/or alimony payments under 5 CFR 550.361;

    7. For a flexible benefit plan established by OPM under 26 USC. section 125; and

    8. To pay an employee's share of Federal Employees' Health Benefits premiums, consistent with 5 CFR 892.

6.550.1.2.2  (12-10-2009)
Allotments and Assignments - Limitations

  1. The 5 CFR 550.312 defines the limitations and requirements for making such allotments.

6.550.1.3  (12-10-2009)
Pay from More than One Position

  1. Per 5 USC. 5533 and 5 CFR part 550, subpart E, Federal employees are prohibited from receiving pay from more than one Federal Government source when the total number of hours worked exceeds 40 in a week.

  2. These restrictions do not apply to pay:

    1. From a position for services performed under emergency conditions relating to health, safety, protection of life and property, or national emergency; or

    2. When a department, agency, or the government of the District of Columbia encounters difficulty in obtaining employees to perform required personal services as described in 5 USC. 5533(a).

  3. The authority to approve exceptions to restrictions on pay for working in excess of 40 hours a week in more than one position (dual employment) is delegated to Embedded Human Capital Officers in the business units.

  4. Per General Legal Service (GLS) opinion dated March 26, 1999, IRS employees are restricted from working for the U.S. Census Bureau.

  5. The authority to request a waiver of the Dual Compensation Act (dual pay and dual employment) through the Department of the Treasury to OPM to reemploy retired military and civilian personnel without loss of pay or annuity, as provided by the Federal Employees Pay Comparability Act of 1990, is delegated to the IRS Human Capital Officer and may not be redelegated.

6.550.1.4  (12-10-2009)
Severance Pay

  1. This guidance is to be read and implemented with 5 USC. 5595 and 5 CFR 550, subpart G, which authorizes severance pay for employees who are involuntarily separated from Federal service and who meet other conditions of eligibility.

  2. Except for the exclusions stated in 5 USC. 5595(a)(2)(B)(i) through (viii), this policy applies to each full-time or part-time IRS employee with a regularly scheduled tour of duty who is serving under a qualifying appointment, as defined in 5 CFR 550.703 and section 6.550.1.4.1 below.

  3. The definitions found at 5 CFR 550.703 apply with regard to severance pay.

    1. Commuting area - The IRS Commuting Area document at http://hco.web.irs.gov/pdf/commuteareas0506.pdf defines the commuting area between posts of duty and provides supplementary information to the regulatory definition.

    2. Reasonable offer means the offer of a position which meets all the following conditions:

      1. The offer is in writing;

      2. The employee is qualified for the position offered; and

      3. The position is within IRS, within the commuting area (unless geographic mobility is a condition of employment), of equal or greater tenure, the same work schedule (part-time or full-time), and not lower than two grade or pay levels below the employee's current grade or level. When the offered position is in a different pay system, the comparison rates must be compared. The comparison rate of the new position may not be lower than the comparison rate of a grade or pay level two grades or levels below the employee's current position.

      4. For paybanded positions, the term "band" has the same meaning as "grade;" however, a position one band below the employee's current band level is considered a "reasonable offer" when that next lower band comprises two or more grades (see OPM Criteria for IRS Broadbanding System, Section V(G)(3)).

6.550.1.4.1  (12-10-2009)
Eligibility for Severance Pay

  1. To be eligible for severance pay, an employee must:

    1. Be serving under a qualifying appointment including career or career-conditional appointment in the competitive service or the equivalent in the excepted service (see 5 CFR 550.703 for full definition of qualifying appointment);

    2. Have completed at least 12 months of continuous service as described in See IRM 6.550.1.4.2.below; and

    3. Be removed from Federal service by involuntary separation, through no fault of the employee (not for cause).

  2. An employee is not eligible for severance pay if he or she:

    1. Is serving under a non-qualifying appointment (see 5 CFR 550.703 for full definition of non-qualifying appointment);

    2. Declines a reasonable offer of assignment to another position;

    3. Is receiving injury compensation under 5 USC. 81, subchapter I (e.g., for total temporary or permanent disability per 20 CFR 10.421(c)), unless the injury compensation is already being received concurrently with pay or is the result of someone’s death; or

    4. Is eligible upon separation for an immediate annuity from a Federal civilian retirement system or from the uniformed services.

6.550.1.4.2  (12-10-2009)
Severance Pay - Requirements for 12 Months of Continuous Employment

  1. The requirement for 12 months of continuous employment is met if, on the date of separation, an employee has held one or more civilian Federal positions over a period of 12 months without a single break in service of more than 3 calendar days. In addition, the position(s) held must have been under:

    1. One or more qualifying appointments; or

    2. One or more non-qualifying temporary appointments that were preceded by a qualifying appointment.

  2. When a break in service covered by severance pay interrupts otherwise continuous Federal employment, the entire period is considered continuous service.

  3. A period during which an employee receives continuation of pay or compensation for an injury on the job under 5 USC. chapter 81 is considered continuous Federal service.

6.550.1.4.3  (12-10-2009)
Severance Pay - Criteria for Involuntary Separation

  1. An employee who resigns expecting to be involuntarily separated is considered to have been involuntarily separated if the employee resigns after receiving:

    1. Specific written notice, to include a notice of proposed removal, that he or she will be involuntarily separated (not for unacceptable performance or conduct) by a particular action effective on a particular date; or

    2. A general written notice of reduction in force or transfer of functions.

  2. The general written notice must:

    1. Be issued by the business unit;

    2. Announce that the agency has decided to abolish, or transfer to another commuting area, all positions in the competitive area (as defined in 5 CFR 351.402) by a particular date (no more than 1 year after the date of the notice); and

    3. State that, for severance pay purposes, a resignation following receipt of the notice is an involuntary separation.

  3. Except for resignations under the conditions described in (1) above, all resignations are voluntary separations and do not provide entitlement to severance pay.

  4. A resignation is not considered an involuntary separation if the specific or general written notice is canceled before the actual separation (based on that resignation) takes effect.

6.550.1.4.4  (12-10-2009)
Computation of Severance Pay Fund

  1. The basic severance pay fund and allowance will be computed as provided at 5 CFR 550.707.

  2. Age adjustment allowance. The basic severance pay allowance is increased by an age adjustment allowance consisting of 2.5 percent of the basic severance pay allowance for each full 3 months of age over 40 years.

  3. Lifetime limitation. The severance pay fund is limited to that amount which would provide 52 weeks of severance pay (taking into account weeks of severance pay previously received, as provided in 5 CFR 550.712).

6.550.1.4.5  (12-10-2009)
Severance Pay - Creditable Service

  1. The following service is creditable for computing an employee’s severance pay under 5 CFR 550.707:

    1. Civilian service as an employee (as defined in 5 USC. 2105), excluding time during a period of nonpay status that is not creditable for annual leave accrual purposes under 5 USC. 6303(a);

    2. Service performed with the United States Postal Service or the Postal Rate Commission; and

    3. Military service, including active or inactive training with the National Guard, when performed by an employee who returns to civilian service through the exercise of a restoration right provided by law, Executive Order, or regulation.

6.550.1.4.6  (12-10-2009)
Accrual and Payment of Severance Pay

  1. Severance pay accrues and is paid as provided by 5 CFR 550.709 on a day-to-day basis; that is, 1 day of severance pay accrues for each workday or applicable holiday left in the pay period at the same rate at which basic pay would have accrued if the recipient were still employed.

  2. Severance payments are made at the same pay period intervals that salary payments would be made if the recipient were still employed.

  3. When an individual is in a nonpay status immediately before separation, the amount of the severance payment is determined using the basic pay that he or she would have received if he or she had been in a pay status at the time of separation.

  4. Severance pay for seasonal employees is computed according the procedure described in 5 CFR 550.707(b)(4).

6.550.1.4.7  (12-10-2009)
Suspension of Severance Pay

  1. Severance pay is suspended if an individual entitled to severance pay is reemployed by the Government of the United States or the Government of the District of Columbia under a non-qualifying, time-limited appointment. Severance pay is suspended for the life of the appointment. Severance pay resumes, without any re-computation, when the employee separates from the non-qualifying, time-limited appointment. The resumed severance payments are the responsibility of the agency that originally triggered the individual’s severance pay entitlement by separating the individual while he or she was serving under a qualifying appointment.

6.550.1.4.8  (12-10-2009)
Termination of Severance Pay Entitlement

  1. Entitlement to severance pay ends when the individual entitled to severance pay is employed by the Government of the United States or the Government of the District of Columbia, unless employed under a non-qualifying, time-limited appointment as described in IRM 6.550.1.4.7 above; or the severance pay fund is exhausted.

6.550.1.4.9  (12-10-2009)
Severance Pay - Reemployment and Re-credit of Service

  1. When a former employee is reemployed, the Service shall record on the appointment document the number of weeks of severance pay received (including partial weeks).

  2. If an employee again becomes entitled to severance pay, the severance pay allowance must be recalculated, deducting the number of weeks for which severance pay previously was received.

6.550.1.4.10  (12-10-2009)
Severance Pay Records

  1. The National Finance Center (NFC) payroll system provides data on severance payments for the preceding 25 pay periods via PAY/T&A history.

6.550.1.5  (12-10-2009)
Back Pay - Applicability

  1. The guidance and procedures for processing back pay, as provided by 5 USC. 5596 and 5 CFR part 550, subpart H, authorize the payment of back pay, interest, and reasonable attorney fees for the purpose of making an employee financially whole (to the extent possible) when, on the basis of a timely appeal or an administrative determination (including a decision relating to an unfair labor practice or a grievance), the employee is found by an appropriate authority to have been affected by an unjustified or unwarranted personnel action that resulted in the withdrawal, reduction, or denial of all or part of the pay, allowances, and differentials otherwise due to the employee. This guidance should be read and applied together with the cited law and regulations.

  2. Back pay does not apply to any reclassification action.

6.550.1.5.1  (12-10-2009)
Back Pay - Coverage

  1. This information applies to all IRS employees who make back pay claims and may refer to former employees.

6.550.1.5.2  (12-10-2009)
Back Pay - Definitions

  1. The definitions at 5 CFR 550.803 apply for this section.

6.550.1.5.3  (12-10-2009)
Determining Entitlement to Back Pay

  1. When an appropriate authority (see (5) and (6) below) has determined that an employee was affected by an unjustified or unwarranted personnel action, the employee shall be entitled to back pay under 5 USC. 5596 and 5 CFR part 550, subpart H, only if the unjustified or unwarranted personnel action resulted in the withdrawal, reduction, or denial of all or part of the pay, allowances, and differentials to which the employee would otherwise have been entitled.

  2. The criteria for such determinations is found at 5 CFR 550.804.

  3. The employee or his or her representative may initiate a timely appeal or grievance under an appeal or grievance system, including appeal or grievance procedures included in a collective bargaining agreement, a claim against the Government of the United States, a discrimination complaint, or an unfair labor practice charge.

  4. An unwarranted or unjustified personnel action is corrected when the appropriate authority, after a review, corrects or directs the correction of the unjustified or unwarranted personnel action that resulted in the loss of pay or benefit.

    1. The pay and benefits paid as back pay (including payments made under any grievance or arbitration decision or any settlement agreement) may not exceed that authorized by any applicable law, rule, regulation, or collective bargaining agreement, including any applicable statute of limitations.

    2. The IRS may not authorize any pay or benefit in any case for a period beginning more than 6 years before the date of the filing of the appeal, or, absent such filing, the date of the administrative determination that the employee is entitled to back pay, consistent with 31 USC. 3702(b). (See also 5 CFR 178.104 and 550.804(e).)

    3. For back pay claims under the FLSA, an agency must apply the 2-year statute of limitations (3 years for willful violations) in 29 USC. 255a. (See also 5 CFR 178.104, 550.804(e), and 551.702.)

  5. The authority to review, take, direct, or recommend corrective action in any personnel matter, including cases involving classification actions, retroactive promotions, and back pay, when submitted by National Headquarters and the business units for higher- level administrative review and determination, is delegated to the IRS Human Capital Officer and may not be redelegated. This authority does not apply to Executive Resources Board covered positions and actions taken or approved by the Deputy Commissioners and Assistant Deputy Commissioners.

  6. The authority to approve personnel actions for corrective action in any personnel matter, including cases involving classification actions, retroactive promotions, and back pay, is delegated to Embedded Human Capital Officers in the business units for employees under their supervision and control.

6.550.1.5.4  (12-10-2009)
Back Pay Computations

  1. When a correction of an unjustified or unwarranted personnel action has been directed by appropriate authority, the responsible business unit, Workforce Relations Division, or GLS will forward the authority’s decision to the Agency-Wide Shared Services (AWSS) Payroll Center responsible for processing back pay actions. The completed corrections provide that:

    1. The employee is deemed to have performed service for the IRS during the period covered by the corrective action; and

    2. The employee is entitled to the pay and benefits he or she would have received if the unjustified or unwarranted personnel action had not occurred.

  2. An employee shall not be granted more pay and benefits under 5 USC. 5596 than he or she would have received if the unjustified or unwarranted personnel action had not occurred.

  3. Except as described in (4) below, a calculation of the amount of back pay payable under this subsection may not include any period during which the employee:

    1. Was not ready, willing, and able to perform his or her duties because of an incapacitating illness or injury; or

    2. Was unavailable for the performance of his or her duties for reasons other than those related to, or caused by, the unjustified or unwarranted personnel action.

  4. The IRS will grant, upon request of the employee, any sick or annual leave available to the employee for a period of incapacitation.

  5. The net amount of back pay payable to an employee, minus the appropriate offsets and deductions, is calculated by the AWSS Payroll Center responsible for processing back pay actions in accordance with regulations in 5 CFR 550.805.

  6. Interest is calculated under 5 CFR 550.806 on the back pay computed before making deductions for erroneous payments, as required by 5 CFR 550.805(e)(2).

  7. Annual leave restored to an employee in excess of 240 hours (or other maximum leave accumulation as applicable to the employee) shall be credited to a separate leave account. The employee must schedule and use such annual leave as provided by 5 CFR 550.805(g)(1) and (2):

    1. A full-time employee shall schedule and use excess annual leave of 416 hours or less by the end of the leave year in progress 2 years after the date on which the annual leave is credited to the separate account. This period shall extend by 1 leave year for each additional 208 hours of excess annual leave or any portion thereof.

  8. An employee’s Thrift Savings Plan account must be corrected consistent with the Federal Retirement Thrift Investment Board regulations. (See 5 CFR parts 1605 and 1606.)

6.550.1.5.5  (12-10-2009)
Back Pay Interest Computations

  1. In computing the amount of interest due under 5 USC. 5596, IRS shall follow the process detailed at 5 CFR 550.806.

    1. Interest begins to accrue on the date or dates (usually one or more pay dates) on which the employee would have received the pay or benefits had the unjustified or unwarranted personnel action not occurred.

    2. Interest accrual ends no more than 30 days before the date of the back pay interest payment. No interest is payable if a complete back pay payment is made within 30 days after any erroneous withdrawal, reduction, or denial of a payment, and the interest accrual ending date is set to coincide with the interest accrual starting date.

6.550.1.5.6  (12-10-2009)
Back Pay - Payment of Reasonable Attorney Fees

  1. An employee, or his or her personal representative, may request payment of reasonable attorney fees related to an unjustified or unwarranted personnel action. Such a request may be presented only to the authorized authority that corrected or directed the correction of the unjustified or unwarranted personnel action. However, if the finding that provides the basis for a request for payment of reasonable attorney fees is made on appeal from a decision by an appropriate authority other than the employing agency, the employee or the employee’s personal representative shall present the request to the appropriate authority from which the appeal was taken.

  2. The finding authority shall provide an opportunity for the employing agency to respond to a request for payment of reasonable attorney fees.

  3. Except as provided in (4) below, when the authority corrects or directs the correction of an unjustified or unwarranted personnel action, the payment of reasonable attorney fees shall be deemed to be warranted only if:

    1. The payment is in the interest of justice, in accordance with standards established by the Merit Systems Protection Board under 5 USC. 7701(g); and

    2. There is a specific finding setting forth the reasons such payment is in the interest of justice.

  4. When it is determined that such payment is warranted, IRS shall pay attorney fees in an amount determined to be reasonable. When an authority determines that such payment is not warranted, no such payment shall be required.

  5. When a determination that an employee has been affected by an unjustified or unwarranted personnel action based on a finding of discrimination prohibited under 5 USC. 2302(b)(1), the payment of attorney fees shall be in accordance with the standards prescribed under the Civil Rights Act of 1964, as amended (42 USC. 2000e 5(k)).

  6. The payment of attorney fees is limited to the services of members of the Bar and for the services of legal professionals assisting members of the Bar. No payment is for the services of any employee of the Federal Government, except as provided in 18 USC. 205, relating to the activities of officers and employees in matters affecting the Government.

  7. The determination concerning the payment of attorney fees as in the interest of justice and the amount of any such payment is subject to review or appeal only if provided for by statute or regulation.

6.550.1.5.7  (12-10-2009)
Back Pay - Prohibition Against Setting Aside Proper Promotions

  1. Nothing in 5 USC. 5596 or 5 CFR part 550, subpart H, shall be construed to authorize the setting aside of an otherwise proper promotion by a selecting official from a group of properly ranked and certified candidates.

6.550.1.6  (12-10-2009)
Pay for Duty Involving Physical Hardship or Hazard

  1. Hazard differential pay may be granted to full-time, part-time, and intermittent GS and IR employees. It is additional compensation paid to employees for duty involving physical hardship or hazards, as defined in 5 CFR 550, subpart I.

  2. The definitions in 5 CFR 550.902 apply for this section.

  3. A schedule of hazard pay differentials is established in Appendix A of 5 CFR 550, subpart I.

  4. The authority to pay a hazard pay differential is delegated to no lower than second-level supervisors. Before crediting hazard pay, verify with the Embedded Human Capital Office that both the situation and the employee qualify for hazard pay. Use must be consistent with applicable regulations in CFR 550, subpart I.

  5. Second-level supervisors who authorize payments for hazardous duty must document the approval and include the specific hazardous duty listed in Appendix A and the number of hours the employee was compensated. A copy of the signed documentation must be attached to time and attendance records and maintained in accordance with those records retention requirements.

  6. Hazard pay shall not be paid to an employee when the hazardous duty or physical hardship has been taken into account in the classification of the position or for hours for which the employee receives annual premium pay for administratively uncontrollable overtime work under 5 CFR 550.151 or law enforcement availability pay for criminal investigators under 5 CFR 550.181.

6.550.1.7  (12-10-2009)
Adjustment of Work Schedules for Religious Observances

  1. The policy with regard to adjustment of work schedules for religious observances applies to all IRS employees.

6.550.1.7.1  (12-10-2009)
Compensatory Time Off for Religious Observances - Overview

  1. Under provisions of 5 USC. 5550a and 5 CFR part 550, subpart J, an IRS employee whose personal religious beliefs require absence from work during certain periods may elect to work additional hours to make up for absences to meet those religious requirements. Employees may also request annual leave, LWOP, previously earned compensatory time earned in lieu of overtime, or a change to their regularly scheduled tour of duty to accommodate their personal religious beliefs.

  2. The pay provisions for overtime work in 5 CFR part 550, subpart A, and the FLSA do not apply to work performed by an employee for this purpose.

  3. Managers should generally approve requests for absences due to personal religious reasons and approve requests to earn religious compensatory time unless:

    1. the employee’s presence on the job at the time of the absence is deemed necessary; or

    2. there is not a reasonable foreseeable opportunity to work during normal non-duty hours and, therefore, repay the compensatory time within a reasonable period (120 days); or

    3. significant security, utility, rental, or other costs would be incurred if work at normal non-duty times was permitted; or

    4. the employee has a current balance of religious compensatory time previously earned and has not yet scheduled that time off (in no case will the accumulation of advanced religious compensatory time exceed 80 hours unless special circumstances are present); or

    5. the employee has an outstanding negative balance and has not yet begun to repay it consistent with the repayment plan.

  4. Religious compensatory time can only be accrued and taken for its proper purpose; i.e., for an employee to meet his or her specific religious obligations. It cannot be accumulated in excess of what is required for use nor can it be used to supplement annual leave or circumvent the payment of overtime.

  5. Advanced religious compensatory time balances (outstanding negative balances) should be repaid before approving employees’ voluntary requests to earn overtime, compensatory time, or credit hours.

6.550.1.7.2  (12-10-2009)
Compensatory Time off for Religious Observances - Requirements

  1. Requirements for requesting and approving religious compensatory time are as follows:

    1. An employee should submit, to his or her manager, a written request to take compensatory time off for a specific religious observance(s) that identifies the need to abstain from work. Notification should take place 15 calendar days in advance, whenever possible.

    2. The employee and manager must establish a plan (generally for 120 calendar days) that documents the religious compensatory time that will either be worked in advance of the requested time off for the religious observance or worked after the time off is taken for the religious observance. The plan should show the dates and times the employee is requesting to be absent for the religious observance(s) and the dates and times the employee will work to repay the religious compensatory time used.

      1. An employee will be permitted to accumulate only the hours of work needed for anticipated absences from work for religious observances that are planned in the near future (normally within 120 days). If the date of the requested absence for the religious observance is not identified, the manager should disapprove the request to work religious compensatory time.

      2. When religious compensatory time is advanced to an employee, the total amount must be paid back within the time specified in the repayment plan (normally 120 days). If the compensatory time is not repaid within the time period specified in the repayment plan, the outstanding time will be converted to annual leave or LWOP, as appropriate.

    3. Managers will monitor the repayment plan to ensure that the employee is repaying the time as agreed.

    4. If through no fault of the employee, terms of the repayment plan are not met, the manager will extend the repayment time frame. The plan should be annotated with the revised dates and times the employee will work to repay the time.

  2. Religious compensatory time may be earned and used in 15-minute increments.

  3. First-level supervisors will use SETR to maintain records of religious compensatory time earned and used. When posting religious compensatory time accrued (worked) in SETR, "R" is recorded in the Time Code column, under the business unit's appropriate program code. For religious compensatory time used, code 990-59825, religious compensatory leave, is posted. A report, Religious Comp Time, is available in SETR under the " Leave Usage Reports" tab. This report may be used by employees and managers to track religious compensatory time accrued and used.

    1. Care should be exercised when maintaining and referencing religious compensatory time documents which involve sensitive or personally identifiable information.

  4. If religious compensatory time off has not been repaid by the date the employee separates, a debt will be established. However, if there is sufficient annual leave to the employee’s credit, he or she may choose to have the excess compensatory time off charged as annual leave.

  5. When an employee separates from the Service with unused religious compensatory time to his or her credit, the employee will be paid for the unused compensatory time at the rate of basic pay at the time the work was performed. This should be a rare instance in that employees should not be allowed to accrue religious compensatory time without a specific time frame to use it as noted above.

6.550.1.8  (12-10-2009)
Collection by Offset from Indebted Government Employees

  1. Debt collection procedures for salary offset will follow the law and regulations at 5 USC. 5514 and 5 CFR part 550, subpart K. IRS’s salary offset procedures are administered by AWSS, Employee Support Services.

6.550.1.9  (12-10-2009)
Lump-sum Payment for Accumulated and Accrued Annual Leave

  1. Lump-sum payments for accumulated and accrued annual leave will be calculated, processed, paid, refunded, and re-credited, as appropriate, under the provisions of 5 USC. 5551, 5552, and 6306, and 5 CFR part 550, subpart L. For additional information, see IRM 6.630.1.

  2. IR payband employees who meet the eligibility requirements in 5 CFR 550.1203 may receive the benefit of their Performance Based Increase (PBI) for calculation purposes of their accrued annual leave lump-sum payment. For additional information refer to the Annual Leave Lump-Sum Payments fact sheet on the Payband Resource Center website at http://hco.web.irs.gov/apps/payband/index.htm .

6.550.1.10  (12-10-2009)
Compensatory Time Off for Travel

  1. Consistent with the provisions of 5 USC. 5550b and 5 CFR part 550, subpart N, it is the policy of the IRS that, to the extent practicable, employees will not be required to travel during non-duty hours. However, subject to the conditions outlined in this section, compensatory time off for travel must be granted if:

    1. The employee is required to travel away from the official duty station; and

    2. The travel time is not otherwise compensated as hours of work under another legal authority.

6.550.1.10.1  (12-10-2009)
Compensation Time Off for Travel - Coverage

  1. This policy applies to all IRS employees except the Commissioner, members of the SES, and employees on an intermittent appointment. Employees in senior-level (SL) and scientific or professional (ST) positions and prevailing rate system (wage grade) employees are covered under this policy.

6.550.1.10.2  (12-10-2009)
Compensatory Time Off for Travel - Definitions

  1. Definitions as related to the compensatory time off for travel policy are found at 5 CFR 550.1403, and are supplemented by the following:

    1. Extended or Unusual Waiting Times - refers to time between actual periods of travel in which an employee is free to rest, sleep, eat, or otherwise use this time for their own purposes and is not creditable as time in a travel status.

    2. Official Duty Station - is the employee’s "post of duty" (official worksite) as noted on the most current Notification of Personnel Action, SF-50. This term also refers to a 50-mile geographic radius of an employee’s official duty station.

    3. Travel Outside the Duty Station - is travel more than 50 miles from the official duty station. Travel within the duty station is not creditable for compensatory time off for travel.

    4. Usual Waiting Time - is the normal suggested time to arrive at a transportation terminal (an airport or train depot) before departure of a commercial flight or train. The suggested time varies usually from 30 minutes to 2 hours among airports or train stations. The IRS maximum time period considered usual waiting time is 2 hours for domestic flights and up to a maximum of 3 hours for international travel. Usual waiting time is applied to each leg of a travel segment (i.e., up to 2 hours before originating domestic flights and a maximum of 2 hours for layover between connecting flights).

6.550.1.10.3  (12-10-2009)
Compensatory Time Off for Travel - Creditable Travel Time

  1. The following requirements must be met in order to be eligible for consideration:

    1. Travel outside of regular working hours must be ordered by the employee’s supervisor for the benefit of the government;

    2. Travel must be outside of the employee’s official duty station (defined as more than 50 miles for the purpose of this section);

    3. Time spent in a travel status must not be otherwise compensable hours of work under any other legal authority (e.g., availability pay, overtime pay); and

    4. Following management directed travel, employees must submit a written request within 5 workdays following completion of the travel to the immediate supervisor for final approval to earn the compensatory time off for travel. Failure to submit the request within the specified time period will result in denial of the request.

  2. Time that is not considered creditable:

    1. Time spent traveling to a new official duty station is not creditable for compensatory time off for travel. An employee is traveling from one official permanent duty station to another permanent duty station, and therefore, the travel is not covered under the compensatory time off for travel provisions;

    2. Extended or unusual waiting periods are not creditable for compensatory time off for travel. Employees must report and deduct these extended waiting time periods. This includes delays due to cancelled flights, inclement weather, or missed connections. It is not creditable time even though it is outside the control of the employee;

    3. Commute time which an employee normally encounters on a daily basis and is considered usual home-to-work and work-to-home time is only creditable under certain circumstances. When commute time is not creditable, it must be deducted from the employee’s calculation even if the travel is completed on a non-workday, such as on a Saturday or a Sunday; and

    4. Time spent traveling in connection with union activities is not considered official travel and is not creditable for compensatory time off for travel.

  3. Multiple days of travel:

    1. Only the first and last day of travel to a single destination assignment may be considered for compensatory time off for travel. If an employee on a multiple-day travel assignment chooses to return home at night or on weekends rather than use the temporary lodging authorized at the temporary duty location, only travel from home to the temporary duty location and return on the first and last days of travel are creditable hours. These travel hours on the first and last days are subject to the deductions for normal commuting time (home-to-work and work-to-home).

    2. The majority of daily travel home is at the employee’s request and for personal benefit. However, in rare instances, a business unit may have a travel assignment for an employee where it would be advantageous to the government for the employee to return home rather than staying overnight at the temporary duty location. In these instances, the manager must first compare the reduced lodging costs against the additional travel expenditures plus the lost labor time (hourly rate of employee’s salary times the number of hours that would be approved and credited for compensatory time off for travel). If there is a net savings to the government, then an exception to the first day/last day only policy may be granted only with approval of the second-level manager.

    3. If an employee travels to multiple locations on multiple days, then the travel time may be creditable when directed and performed during non-duty hours.

  4. Multiple time zones:

    1. When travel involves two or more time zones, the time zone from the point of first departure must be used to determine how many hours the employee spends in a travel status to the temporary duty location and how many of those hours would be considered creditable in the computation of compensatory time off for travel.

    2. The creditable time for the return trip will be based upon the time zone of the temporary duty location.

  5. Alternative transportation:

    1. The Official IRS Travel Guide, at IRM 1.32.1.1.8, states "Travel must be by the most expeditious means of transportation practicable ... the IRS must consider energy conservation, total cost to the Government (including costs of per diem, overtime, lost work -time, and actual transportation costs) ... ." If an employee uses an alternate mode of transportation, it may result in additional time spent in a travel status. When a supervisor approves use of an alternate mode of transportation, it must be approved prior to the travel and a determination made on the estimated time in a travel status that would have been creditable for compensatory time off for travel had the employee used the authorized mode of transportation.

    2. When an alternative travel mode has been approved, the employee will be credited with the lesser of:

      1. The estimated number of creditable non-duty hours in a travel status for the authorized mode of travel; or

      2. The actual time of creditable non-duty hours authorized as an alternative.

  6. See the decision logic tables below to determine compensatory time for travel:

    a) Travel to or From a Temporary Duty Station or an Alternate Worksite

    If the travel originates from or ends at the employee's and the employee travels to a location/alternate worksite, then, is the time spent traveling creditable for compensatory time off?
    residence within the official duty station No. This is considered normal home-to-work or work-to-home commute time.
    residence outside the official duty station Yes, minus the normal home-to-work or work-to-home commute time.
    official duty station worksite within the official duty station No. This is considered normal home-to-work or work-to-home commute time.
    official duty station worksite outside the official duty station Yes, minus the normal home-to-work or work-to-home commute time.

    b) Travel To or From a Transportation Terminal (e.g., Airport or Train Depot)

    If the travel originates from or ends at the employee's and the employee travels to a transportation terminal, then, is the time spent traveling creditable for compensatory time off?
    residence within the official duty station No. This is considered normal home-to-work or work-to-home commute time.
    residence outside the official duty station Yes, minus the normal home-to-work or work-to-home commute time.
    official duty station worksite within the official duty station Yes. There is no commuting time offset. The employee has already commuted to the official duty station.
    official duty station worksite outside the official duty station Yes. There is no commuting time offset. The employee has already commuted to the official duty station.

6.550.1.10.4  (12-10-2009)
Compensatory Time Off for Travel - Manager and Employee Responsibilities

  1. Front-line managers are responsible to:

    1. Direct travel outside regular working hours and outside of the normal duty station prior to the travel occurring;

    2. Document the reason for directing the travel outside of regular working hours;

    3. Review employee requests to earn compensatory time off for travel and approve all time meeting regulatory and policy requirements;

    4. Manage employee requests to use compensatory time off for travel earned;

    5. Ensure accurate reporting of earning and use of approved compensatory time off for travel in the SETR timekeeping system. For time earned, enter time code T; for time used, enter OFP code 990-59824;

    6. Monitor the 26-pay-period time limitation for using credited compensatory time off for travel; and

    7. Maintain official documents of the earned and approved employee requests in accordance with time and attendance records retention requirements (6 years).

  2. Employees are responsible to:

    1. Plan directed travel in the most efficient manner;

    2. Track all travel time performed outside their regularly scheduled hours of work;

    3. Track unusual waiting times and delays experienced outside of regular hours of work while in a travel status;

    4. Submit a request to earn compensatory time off for travel within 5 workdays following travel completion. Failure to submit a claim within the specified time period will result in a denial of the request; however, the employee's immediate supervisor may make a case-by-case exception to the 5-workday time limit due to unforeseen or extenuating circumstances that prevented the employee from submitting the request; and

    5. Use accrued compensatory time off for travel hours within 26 pay periods after the time is credited or the time will be forfeited.

  3. Employees are responsible for completing either the Commercial Transportation Worksheet or the Privately Owned Vehicle/Government Owned Vehicle Worksheet when requesting compensatory time off for travel. These forms are available at http://erc.web.irs.gov/Displayanswers/Question.asp?FolderID=5&=3&=186 . Information provided must include:

    1. Point of departure;

    2. Time of departure;

    3. Time spent traveling from the official duty station to the temporary duty station;

    4. Normal commute time between home and official duty station;

    5. Name and location of the transportation terminal;

    6. Number of miles from the official duty station to the transportation terminal;

    7. Transportation terminal recommended arrival time before departure;

    8. Layovers between connecting flights; and

    9. Extended waiting periods and delays.

6.550.1.10.5  (12-10-2009)
Crediting Compensatory Time Off for Travel

  1. Approved compensatory time off for travel accrued must be recorded in a separate account from other compensatory time. As with other official timekeeping records, documentation of approved employee requests must be maintained by supervisors for a minimum of 6 years.

  2. Compensatory time off for travel may be accrued and used in 15-minute increments.

  3. An employee’s balance of earned compensatory time off for travel will be maintained if the employee transfers, is reassigned, or is detailed to Treasury or any other bureau within the Department of the Treasury. The gaining bureau will credit the balance to the employee within the same pay period as previously credited with the losing bureau.

6.550.1.10.6  (12-10-2009)
Use of Accrued Compensatory Time Off for Travel

  1. Employees must request permission from their supervisors to schedule the use of accrued compensatory time off for travel in accordance with established leave request policies.

  2. Employees must use accrued compensatory time off for travel by the end of the 26th pay period after the pay period in which it was credited.

  3. Compensatory time off for travel will be charged in the chronological order in which it was earned.

6.550.1.10.7  (12-10-2009)
Forfeiture of Unused Compensatory Time Off for Travel

  1. Except as provided in (2) below, employees will forfeit credited compensatory time off for travel when any of the following occurs:

    1. Earned time is not used by the employee by the end of the 26th pay period from which it was credited.

    2. An employee separates from Federal service. An employee may not receive payment for any unused compensatory time off for travel under any circumstances. Even in the event of the employee’s death, surviving beneficiaries are not entitled to receive payment for the unused compensatory time off for travel earned.

    3. An employee transfers to another agency in the Federal government (outside of the Department of Treasury).

    4. An employee moves to a non-covered Federal position (e.g., SES position).

  2. The exceptions to the requirement that an employee forfeit unused compensatory time for travel after the end of the 26th pay period from which it was credited or upon separation from IRS are as follows:

    1. An employee who separates or is placed in a LWOP status to perform service in the uniformed services as defined under 38 USC. 4303 and 5 CFR 353.102 and later returns to the Service through the exercise of a reemployment right provided by law, Executive Order, or regulations;

    2. An employee who separates or is placed in a LWOP status because of an on-the-job injury with entitlements to injury compensation under 5 USC. chapter 81 and later recovers sufficiently to return to work; or

    3. The failure to take the compensatory time off is due to an exigency of the Service, as determined by an SES member, and the use of that time was scheduled in writing before the 24th pay period after it was earned.

  3. In the case of the exceptions in (2) above, the time limit for using compensatory time off is extended for up to an additional 26 pay periods.

6.550.1.10.8  (12-10-2009)
Prohibition Against Payment for Unused Compensatory Time Off for Travel

  1. As per 5 USC. 5550b(b), an employee may not receive payment of any kind for compensatory time off for travel earned under subpart N under any circumstances. This prohibition of payment is also applicable to surviving beneficiaries.

6.550.1.10.9  (12-10-2009)
Compensatory Time off for Travel - Premium and Aggregate Pay Caps

  1. Compensatory time off for travel is not considered when applying the biweekly and annual pay limitations in 5 USC. 5547 (5 CFR 550.105-107) or the aggregate limitation on pay in 5 USC. 5307 (5 CFR part 530, subpart B).

Exhibit 6.550.1-1  (12-10-2009)
Overtime Pay and Compensatory Time in Lieu of Overtime Pay Table

Overtime Pay and Compensatory Time in Lieu of Overtime Pay - Fair Labor Standards Act (FLSA) Exempt and Non-exempt Employees
Per IRM 6.550.1.1.5, the authority to order or approve the performance of paid overtime duty, provided funds are available for such duty, and to order or approve the performance of overtime duty for which compensatory time off will be granted in lieu of overtime pay in accordance with applicable statutes, executive orders, regulations, and policies, is delegated no lower than to second-level supervisors and must be done in writing.

Employees must be placed on the correct standard position description (SPD) as the designation of FLSA status and coverage is based upon the duties performed in the assigned position. The FLSA designation is officially noted on the employee's SPD and Standard Form 50, Notification of Personnel Action. Managers may not reassign employees to erroneous SPD's to afford them various options for overtime payment.

FLSA and Title 5 determine the applicability and computation of employees' overtime payments and compensatory time off in lieu of overtime payments. Overtime laws and regulations apply to all employees, regardless of bargaining unit status. Overtime as it involves bargaining unit employees is also addressed in the National Agreement, Article 24, Overtime. Article 24 states that employees who are required by the Employer to work overtime will be compensated in accordance with applicable law and regulations.

The following provides an overview of overtime payment, compensatory time in lieu of overtime payment, and pay caps in relation to FLSA exempt and non-exempt employees.
  FLSA EXEMPT FLSA NON-EXEMPT
Overtime Employees in positions that are designated as FLSA exempt (not covered under FLSA) area covered under Title 5, USC., with overtime pay provisions defined by 5 CFR 550, subpart A. Overtime pay provisions for employees that are designated as FLSA non-exempt (covered under the FLSA) are defined in 5 CFR 551.
For FLSA exempt employees whose rate of basic pay is equal to or less than the rate of basic pay for GS-10, step 1, the overtime pay is based on time and a half of their actual hourly rate.

For FLSA exempt employees whose rate of basic pay is greater than GS-10, step 1, the overtime hourly rate is the greater of:

1) the hourly rate of basic pay for GS-10, step 1, multiplied by 1.5; or

2) the employee's hourly rate of basic pay.
FLSA non-exempt employees must receive overtime pay based on time and a half of their actual hourly rate. All overtime work that is ordered, approved, suffered, or permitted, must be compensated. However, employees on flexible work schedules (flexitour with credit hours) may not earn overtime compensation as a result of "suffered or permitted " overtime work. "Suffered or permitted" means any work performed by an employee, whether requested or not, provided the employer's supervisor is aware that the work is being performed and failed to act in a reasonable period of time to stop the employee from performing the work.
Compensatory Time Off in Lieu of Overtime Payment Exempt employees are eligible to earn and use compensatory time in lieu of overtime payment. Non-exempt employees are eligible to earn and use compensatory time in lieu of overtime payment; however, they may never be required to accept compensatory time in lieu of overtime pay under any circumstances.
Managers may require that FLSA exempt employees, whole rate of basic pay is greater than GS-10, step 10, be compensated with compensatory time off instead of overtime payment. Non-exempt employees may voluntarily request compensatory time in lieu of overtime payment.
Additional Compensatory Time Information An employee's compensatory time balance may not exceed 80 hours at any time. An employee's compensatory time balance may not exceed 80 hours at any time.
Employees have 26 pay periods to use the earned hours (on a first-in, first-out basis). Employees have 26 pay periods to use the earned hours (on a first-in, first-out basis.)
Exempt employees who do not use their balance of compensatory time hours by the end of 26 pay periods forfeit the hours. FLSA non-exempt employees do not forfeit earned compensatory time off not used, but are paid the dollar value of overtime pay the employee would have received when the compensatory time was worked.
Biweekly Pay Limitation on Overtime Payment There is a biweekly pay limitation that limits the amount of premium pay that can be paid to an exempt employee during a biweekly pay period. The biweekly pay limitation on overtime payment and compensatory time off in lieu of overtime pay does not apply to employees designated as FLSA non-exempt.
Under 5 USC 5547(a) and 5 CFR 550.105, premium pay cannot be paid to GS employees to the extent that doing so would cause an employee's basic pay, overtime pay, the dollar value of compensatory time off, night pay, annual premium pay, Sunday premium pay, and holiday premium pay to exceed the greater of the biweekly rate for:

1) GS-15, step 10 (including any applicable special salary rate or locality rate of pay), or

2) Level V of the Executive Schedule.

The following link provides information on biweekly pay caps by locality: http://www.opm.gov/oca/pay/
 
Biweekly Limitation on Compensatory Time Off in Lieu of Overtime Payment The biweekly pay limitation in 5 USC. 5547 (see above) is also a ceiling on compensatory time off. Compensatory time off is merely an alternative form of payment for overtime work. As such, the value of an hour of compensatory time off is equal to the overtime hourly rate that is payable in dollars.

Thus, the number of hours for which an employee may receive monetary overtime pay is also the number of hours of compensatory time off that may be credited in a pay period. An employee may not exceed the biweekly pay limitation by choosing compensatory time off as a substitute for monetary overtime pay.
The biweekly pay limitation on overtime payment and compensatory time off in lieu of overtime pay does not apply to employees designated as FLSA non-exempt.
Credit Hours Both exempt and non-exempt employees are eligible to earn and use credit hours provided they are assigned to a flexitour with credit hours schedule under an alternative work schedule. There are significant distinctions between overtime and credit hours.

Credit hours are not ordered by management but are voluntarily worked and used at the request of the employee to vary the length of a workday or workweek, subject to managerial approval. Credit hours are not overtime hours. For full-time employees, a maximum of 24 credit hours may be carried over from one pay period to the next. For part-time employees, a maximum of 25 percent of the hours in the biweekly work requirement may be carried over to the next pay period. Credit hours may be earned and used in 15-minute increments and may be carried forward for an indefinite period of time.
References: IRM 6.500.1; 5 CFR 550, Subpart A - Premium Pay; 5 CFR 551 - Pay Administration Under the Fair Labor Standards Act; and OPM fact sheets entitled " Overtime and Title V" and "Federal Employees and the FLSA. "

More Internal Revenue Manual