6.550.1 Pay Administration - General

Manual Transmittal

October 18, 2019

Purpose

(1) This transmits revised IRM 6.550.1, Pay Administration (General).

Material Changes

(1) 6.550.1.1 This revised IRM incorporates the Program Scope and Objectives subsection as required by the Internal Management Documents (IMD) System outlined in 1.11.2, Internal Revenue Manual (IRM) Process, dated November 14, 2016.

(2) 6.550.1.3(3) Adds delegation order information.

(3) 6.550.1.3(6) Adds information about Postal Service.

(4) 6.550.1.4(3)(a) Adds definition of commuting area, involuntary separation, and qualifying appointment and provides a link to Workforce Restructuring site, which houses the IRS Commuting Area Document.

(5) 6.550.1.4.2(1)(b) Clarifies that non-qualifying temporary appointments can precede the current qualifying appointment.

(6) 6.550.1.4.3(3) Clarifies for “all employees” in a competitive area.

(7) 6.550.1.4.6(3) Adds “When an individual receives severance pay as the result of an involuntary separation from a qualifying time-limited appointment, the severance payment is based on the rate of basic pay received at the time of that separation.”

(8) 6.550.1.5.2 Adds definitions.

(9) 6.550.1.5.2(2) Moved delegation of authority information from 6.550.1.3 and placed it under the definition of appropriate authority.

(10) 6.550.1.5.3(1) Adds information regarding the Barring Act for determining if a claim is timely. Removed irrelevant delegation information (previously 6.550.1.5.3(5)) and moves relevant delegation information (previously 6.550.1.5.3(6)) to 6.550.1.5.2.

(11) 6.550.1.5.3(2) Adds the requirement for a timely appeal.

(12) 6.550.1.5.3(3) Adds the requirement for administrative determination.

(13) 6.550.1.5.4(1) Removes statement that that the appropriate authority will forward the decision to correct an unjustified or unwarranted personnel action to the HCO, Payroll & Personnel Systems, Payroll Center for back pay computations and mirrors the language of the CFR.

(14) 6.550.1.5.4(6) Adds reference that interest is calculated before deductions for erroneous payments.

(15) 6.550.1.5.4(7) Removes specific timeframe for using restored leave and leaves general. Removes (a) which expanded on only full-time (FT) employees. Includes reference to CFR for specific rules.

(16) 6.550.1.5.5(1) Removes (a) and (b) which were partial procedures, (1) refers to the CFR with full procedures.

(17) Pay for Duty Involving Physical Hardship or Hazard, previously 6.550.1.6, has been removed. No employees have posted this pay within the past 6 years. These questions will be addressed on an individual basis as they arise. Subsequent sections renumbered.

(18) 6.550.1.6 Clarifies that employees on intermittent work schedules are not eligible for religious compensatory time off (RCT).

(19) 6.550.1.6.1(1) Clarifies that employees may also use accumulated credit hours to accommodate their personal religious beliefs.

(20) 6.550.1.6.1(4) Clarifies that RCT cannot be used to circumvent the payment of credit hours, overtime or compensatory time off in lieu of overtime.

(21) 6.550.1.6.2(1)(a) Adds additional requirements for requesting and using RCT.

(22) 6.550.1.6.2(3) Links to a list of Organization Function Program (OFP) codes, rather than listing specific OFP codes, for timekeeping purposes.

(23) 6.550.1.6.2(4) Clarifies that advanced RCT, that has not been repaid before an employee separates, will be withheld from any final payments to the separating employee.

(24) 6.550.1.6.2(5) Includes employees who transfer to another agency/department.

(25) Editorial changes are made throughout to update division and branch names, references, hyperlinks, and terminology.

Effect on Other Documents

This IRM supersedes IRM 6.550.1, issued December 16, 2009. Sections pertaining to premium pay and compensatory time off for travel (formerly 6.550.1.1 - 6.550.1.1.17 and 6.550.1.10) have been removed from this IRM and placed in new IRM 6.550.2, Premium Pay and Compensatory Time Off for Travel

Audience

All Operating Divisions and Functions.

Effective Date

(10-18-2019)

Robin D Bailey, Jr.
IRS Human Capital Officer

Program Scope and Objectives

  1. Purpose: This IRM provides Servicewide policy, standards, requirements, and guidance relating to the administration of pay. This IRM must be read and interpreted in accordance with pertinent law, Government-wide regulations, Treasury Human Resources Directives, as well as applicable case law. The material in this chapter is generally organized consistent with the order of regulations contained in 5 CFR 550. As required, this guidance will be supplemented periodically by interim policy guidance from the IRS Human Capital Office.

  2. Audience: Unless otherwise indicated, the policies, authorities, procedures, and instructions contained in this IRM apply to all operating divisions and functions. Bargaining unit employees should review negotiated agreement provisions relating to subjects in this IRM. Should any of these instructions conflict with a provision in the negotiated agreement, the agreement prevails.

  3. Policy Owner: Human Capital Officer (HCO).

  4. Program Owner: The WBP, Awards, Compensation and Leave Policy (ACLP) Branch.

  5. Primary Stakeholders: HCO, Employment, Talent and Security (ETS); HCO, Payroll & Personnel Systems (PPS).

  6. Program Goals: This IRM is designed to provide IRS guidance relating to general pay administration regulations found in 5 CFR 550.

Background

  1. Sections pertaining to premium pay and compensatory time off for travel (formerly 6.550.1.1 - 6.550.1.1.17 and 6.550.1.10) have been removed from this IRM and placed in new IRM 6.550.2 Premium Pay Under Title 5 and the Fair Labor Standards Act (FLSA) and Compensatory Time Off for Travel. The remaining sections apply to general pay administration policies and regulations under 5 CFR 550 that are applicable to all employees.

Authority

  1. Laws: Title 5, United States Code (USC) at http://uscode.house.gov/browse.xhtml

    1. Title 5, Government Organization and Employees

      • §5514 - Installment deduction for indebtedness to the United States

      • §5525 - Allotment and assignment of pay

      • §5533 - Dual pay from more than one position; limitations; exceptions

      • §5550a - Compensatory time off for religious observances

      • §5551 - Lump-sum payment for accumulated and accrued leave on separation

      • §5552 - Lump-sum payment for accumulated and accrued leave on entering active duty; election

      • §5595 - Severance pay

      • §5596 - Back pay due to unjustified personnel action

      • §6306 - Annual leave; refund of lump-sum payment; recredit of annual leave

    2. Title 31, Money and Finance

      • §3702 - Authority to settle claims

  2. Regulations: Title 5, Code of Federal Regulations (CFR) at https://www.ecfr.gov/cgi-bin/ECFR?SID=48e607ea83e9e1153545d6fbe5a3c168&page=browse,

    1. Part 550 - Pay Under the General Schedule

      • Subpart C - Allotments From Federal Employees

      • Subpart E - Pay From More Than One Position

      • Subpart G - Severance Pay

      • Subpart H - Back Pay

      • Subpart I - Pay for Duty Involving Physical Hardship or Hazard

      • Subpart J - Adjustments of Work Schedules for Religious Observances

      • Subpart K - Collection by Offset From Indebted Government Employees

      • Subpart L - Lump-Sum Payment for Accumulated and Accrued Annual Leave

    2. Part 178 - Procedures for Settling Claims,

      • Subpart A - Administrative Claims - Compensation and Leave, Deceased Employees' Accounts and Proceeds of Canceled Checks for Veterans' Benefits Payable to Deceased Beneficiaries

  3. Delegation of Authority: Delegation Order 6-23, Delegations of Authority to Accomplish Pay Administration.

Roles and Responsibilities

  1. The Human Capital Officer is the executive responsible for this IRM and overall Servicewide policy for pay administration.

  2. The WBP, ACLP Branch is responsible for developing and publishing content in this IRM.

  3. ETS is responsible for calculating severance pay and ensuring processing procedures and pay setting fall within the back pay policies outlined in this IRM.

  4. PPS is responsible for administering the payment of salaries covered in this IRM, offset procedures, and providing systems, tools, and all related instructions to accomplish proper recordation of time off for religious observances on official source documents from which an employee is paid (e.g., time and attendance (T&A) documents, personnel action requests (PAR)).

  5. A manager has the fundamental responsibility to ensure government resources are used efficiently and effectively, with minimum potential for waste, fraud, and mismanagement. As such, he or she must administer procedures covered in this IRM with integrity and in compliance with applicable laws, regulations, and policies.

  6. An employee is responsible to ensure their time and attendance is entered into Single Entry Time Reporting (SETR) system accurately, to review their Statement of Earnings and Leave and SF-50s, and to immediately notify his/her manager of any discrepancies. As a part of his or her ethical responsibilities, an employee must use Religious Compensatory Time (RCT) in accordance with its intended purpose.

Program Management and Review

  1. This IRM provides policy guidance on general pay administration for the IRS. The WBP Division gauges effectiveness of general pay administration policy based on feedback from customers and program owners about subjects contained in this IRM. During review and publishing of this IRM, sections are revised, added or deleted based in part on this process. WBP plays an integral role in program management, review and effectiveness by:

    1. Supporting PPS to deliver biweekly paychecks through timely and accurately posting and processing of all time and attendance records.

    2. Supporting Workforce Relations Division (WRD) to provide related support and expertise to service management, field and embedded labor/employee relations staff and all employees on general pay administration subjects contained in the IRM.

    3. Assisting with administration of IRS WorkLife Programs and Services that help employees balance their jobs alongside life outside work. In doing so, WBP helps employees achieve a higher level of work-life balance.

Program Controls

  1. The WBP Division develops and deploys policies, materials and programs to increase Servicewide awareness and understanding of general pay administration. Additionally, the WBP Division collaborates with other HCO organizations and Servicewide stakeholders to support education and outreach activities as they relate to general pay administration.

  2. The following activities help ensure program success:

    1. Conducting annual policy reviews;

    2. Publishing educational articles such as Leaders’ Alerts and IRS Headlines; and

    3. Maintaining accurate and up-to-date information on websites.

Definitions

  1. Definitions are provided in each subsection as relevant.

Related Resources

  1. IRS Source at: https://irssource.web.irs.gov/Pages/Home.aspx

  2. IRS Payband Resource Center at: http://hco.web.irs.gov/apps/payband/

  3. Office of Personnel Management (OPM) Pay & Leave Fact Sheets at: https://www.opm.gov/policy-data-oversight/pay-leave/pay-administration/#url=Fact-Sheets

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.

Allotments and Assignments - General Provisions

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

    1. dues to a labor organization under 5 USC 7115

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

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

    4. income tax withholding under 5 CFR 550.351

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

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

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

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

Allotments and Assignments - Limitations

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

Pay from More than One Position

  1. Per 5 USC 5533 and 5 CFR 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 the required personal services as described in 5 USC 5533(a).

  3. The authority to approve exceptions for employees to receive pay from more than one position for more than 40 hours a week (dual employment) is delegated to HCO, ETS, Employment Center Chiefs for employees they service and may not be redelegated. This authority can be found in Delegation Order 6-23.

  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 Director, HCO, WBP and may not be redelegated. (See, Delegation Order 6-23)

  6. The Postal Reorganization Act, 39 U.S.C. § 1001(d) allows for an employee of the Government of the United States to be eligible to serve and receive pay concurrently as an officer or employee of the Postal Service (other than as a member of the Board or of the Postal Regulatory Commission) and as an officer or employee of any other department, agency, or establishment of the Government of the United States.

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 to severance pay.

    1. Commuting area: the geographic area surrounding a work site that encompasses the localities where people live and, reasonably, can be expected to travel back and forth daily to work. The IRS Commuting Area Document can be found at http://hco.web.irs.gov/worktran/workrestruct/index.html.

    2. Involuntary separation: a separation initiated by an agency against the employee's will and without his or her consent for reasons other than inefficiency, including a separation resulting from the expiration of a time-limited appointment effected within 3 calendar days after separation from a qualifying appointment. (See 5 CFR 550.703 for full definition.)

    3. Qualifying appointment:
      1. A career or career-conditional appointment in the competitive service or the equivalent in the excepted service;
      2. A career appointment in the Senior Executive Service;
      3. An excepted appointment without time limitation, except under Schedule C or an equivalent appointment made for similar purposes;
      4. An overseas limited appointment without time limitation;
      5. A status quo appointment, including one that becomes indefinite when the employee is promoted, demoted, or reassigned;
      6. A time-limited appointment in the Foreign Service, when the employee was assigned under a statutory authority that carried entitlement to reemployment in the same agency, but this right of reemployment has expired; and
      7. A time-limited appointment (including a series of time-limited appointments by the same agency without any intervening break in service) for full-time employment that takes effect within 3 calendar days after the end of one of the qualifying appointments listed in paragraphs (1) through (6) of this definition, provided the time-limited appointment is not non-qualifying on grounds other than the time-limited nature of the appointment.

    4. Reasonable offer: 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 offered is

      • In the employee's agency, including an agency to which the employee is transferred with his or her function in a transfer of functions between agencies;

      • 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 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 on the same pay schedule as the current position. For IRS payband 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)) at http://hco.web.irs.gov/compbenefits/pdf/OPMIRSCriteria.pdf.

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 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.

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 precede the current 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.

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 which:

      • is issued by the business unit;

      • announces 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

      • states that, for all employees in that competitive area, a resignation following receipt of the notice is an involuntary separation.

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

  3. 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.

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).

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.

    4. Service performed with the government of the District of Columbia by an individual first employed by that government before October 1, 1987, excluding service as a teacher or librarian of the public schools of the District of Columbia.

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 receives severance pay as the result of an involuntary separation from a qualifying time-limited appointment, the severance payment is based on the rate of basic pay received at the time of that separation.

  4. 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.

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

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.

Termination of Severance Pay Entitlement

  1. Entitlement to severance pay ends when:

    1. 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

    2. the severance pay fund is exhausted.

Severance Pay - Reemployment and Re-credit of Service

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

  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 was previously received.

Severance Pay Records

  1. The National Finance Center (NFC) payroll system, Treasury Integrated Management System (TIMIS), provides data on severance payments for the preceding 25 pay periods.

Back Pay - Applicability

  1. The guidance and procedures for processing back pay, as provided by 5 USC 5596 and 5 CFR 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.

Back Pay - Coverage

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

Back Pay - Definitions

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

  2. Appropriate authority: means an entity having authority in the case at hand to correct or direct the correction of an unjustified or unwarranted personnel action, including:

    1. a court

    2. the Comptroller General

    3. the Office of Personnel Management

    4. the Merit Systems Protection Board

    5. the Equal Employment Opportunity Commission

    6. the Federal Labor Relations Authority and its General Counsel

    7. the Foreign Service Labor Relations Board

    8. the Foreign Service Grievance Board

    9. an arbitrator in a binding arbitration case

    10. the head of the employing agency or another official of the employing agency to whom such authority is delegated

    Note:

    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 HCO, ETS, Employment Center Chiefs for employees they service. In the absence of these officials, this authority may be redelegated to Human Resource Specialists. (See Delegation Order 6-23)

  3. Employee: a person holding a position in or under an Executive agency when used to describe an individual making a back pay claim, it also may mean a former employee.

  4. Pay, allowances, and differentials: means pay, leave, and other monetary employment benefits to which an employee is entitled by statute or regulation and which are payable by the employing agency to an employee during periods of federal employment. (see 5 CFR 550.703 for full definition)

  5. Unjustified or unwarranted personnel action: means an act of commission or an act of omission (i.e., failure to take an action or confer a benefit) that an appropriate authority subsequently determines, based on substantive or procedural defects, to have been unjustified or unwarranted under applicable law, executive order, rule, regulation or mandatory personnel policy established by an agency or through a collective bargaining agreement. Such actions include personnel actions and pay actions (alone or in combination).

Determining Entitlement to Back Pay

  1. When an appropriate authority has determined that an employee was affected by an unjustified or unwarranted personnel action, the employee shall be entitled to back pay 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. The criteria for such determinations are found at 5 CFR 550.804.

    Note:

    It’s important to determine the claim is timely under 5 CFR 178.104Statutory Limitations on Claims. 31 USC 3702(b), sometimes referred to as the Barring Act, specifies claims must be presented to the appropriate official or agency within six years after the claim accrues to be considered timely, while the Back Pay Act determines the maximum amount of back pay an employee may receive pursuant to a timely filed claim.

  2. The requirement for a timely appeal is met when:

    1. The employee or his or her representative initiates an 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; and

    2. An appropriate authority accepts that appeal, grievance, claim, complaint, or charge as timely filed.

  3. The requirement for an “administrative determination” is met when an appropriate authority determines, in writing, that an employee has 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 the employee.

  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, allowances, and differentials.

    1. The pay, allowance, and differentials 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, allowances, and differentials under this subpart in any case for a period beginning more than 6 years before the date of the filing of a timely appeal, or, absent such filing, the date of the administrative determination that the employee is entitled to back pay. (See also 5 CFR 178.104 and 5 CFR 550.804(e).)

    3. For back pay claims under the Fair Labor Standards Act (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, 5 CFR 550.804(e), and 5 CFR 551.702.)

Back Pay Computations

  1. When an appropriate authority corrects or directs the correction of 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 an employee:

    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, allowances, and differentials 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, allowances, and differentials than he or she would have received if the unjustified or unwarranted personnel action had not occurred.

  3. Except as described in (4) below, the back pay computation 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 resulting from illness or injury.

  5. HCO, PPS calculates the net amount of back pay payable to an employee, minus the appropriate offsets and deductions in accordance with regulations in 5 CFR 550.805.

  6. When computing the amount of back pay, interest will be included in the amount from which deductions for erroneous payments are made, as required by §550.805(e)(2) of this part.

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

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

Back Pay Interest Computations

  1. HCO, PPS calculates the amount of interest due under 5 USC 5596, in accordance with regulations in 5 CFR 550.806.

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 appropriate 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 appropriate authority to which such a request is presented shall provide an opportunity for the employing agency to respond to a request for payment of reasonable attorney fees.

  3. Except as provided in (5) below, when an appropriate 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, as determined by the appropriate authority in accordance with standards established by the Merit Systems Protection Board under 5 USC 7701(g); and

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

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

  5. When a determination by an appropriate authority 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 made 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 may be allowed 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 whether the payment of attorney fees is 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.

Back Pay - Prohibition Against Setting Aside Proper Promotions

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

Adjustment of Work Schedules for Religious Observances

  1. The policy regarding adjustment of work schedules for religious observances applies to all IRS employees. Employees not serving on a scheduled tour of duty (intermittent) are not eligible for religious compensatory time off (RCT).

Compensatory Time Off for Religious Observances - Overview

  1. Under provisions of 5 USC 5550a and 5 CFR 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, Leave Without Pay (LWOP), previously earned compensatory time earned in lieu of overtime, or accumulated credit hours. For a change to accommodate an ongoing religious requirement see IRM 6.610.1.2.5.2, Religious Conviction.

  2. The pay provisions for overtime work in 5 CFR 550, subpart A, and the Fair Labor Standards Act 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 RCT 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 RCT 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 RCT previously earned and has not yet scheduled that time off (in no case will the accumulation of advanced RCT 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. RCT 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 credit hours, overtime, or compensatory time off in lieu of overtime.

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

Compensatory Time off for Religious Observances - Requirements

  1. Requirements for requesting and approving RCT are as follows:

    1. An employee must submit a written request to his or her manager and obtain prior approval to take compensatory time off for a specific religious observance(s) that identifies the need to abstain from work. An employee may email the request or use Form 14451, Request to Earn and Use Religious Compensatory Time (RCT), to notify his or her manager. Notification should take place 15 calendar days in advance, whenever possible, and will include the following information:

      • The description of the religious observance for which the absence is being requested;

      • Date and time(s) the employee must abstain from work due to the religious observance; and

      • The date(s) and time(s) the employee plans to perform overtime work to earn religious compensatory time off or to make up for the absence (Repayment Plan).

    2. The employee and manager must establish a repayment plan (generally for 120 calendar days) that documents the RCT 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 repayment 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 RCT used.

      • An employee is 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 RCT.

      • When RCT 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 RCT 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 repayment plan should be annotated with the revised dates and times the employee will work to repay the time.

  2. RCT may be earned and used in 15-minute increments.

  3. First-level managers will use SETR to maintain records of RCT earned and used. A list of commonly used OFP codes may be found on the IRS Source at:https://irssource.web.irs.gov/Lists/Timekeeping/DispItemForm.aspx?ID=63&contentTypeId=0x01007B7EC982ED643C41B1C24EF58978D68C A "Religious Comp" report is available in SETR under the "Leave Usage Reports" tab. This report may be used by employees and managers to track RCT accrued and used.

    Note:

    Care should be exercised when maintaining and referencing RCT documents which involve sensitive or personally identifiable information.

  4. If advanced RCT has not been repaid by the date the employee separates, a debt will be established and withheld from any final payments to the separating employee. 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 or transfers to another agency/department with unused RCT to his or her credit, the employee will be paid for the unused RCT at the rate of basic pay in effect at the time the extra hours of work were performed. This should be a rare instance in that employees should not be allowed to accrue RCT without a specific time frame to use it as noted in (1)(b) above.

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 550, subpart K. IRS’s salary offset procedures are administered by HCO, PPS.

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 550, subpart L. For additional information, see IRM 6.630.1, Absence and Leave.

  2. IR payband employees who meet the eligibility requirements in 5 CFR 550.1203 may have their Performance Based Increase (PBI) included in the calculation of their accrued annual leave lump-sum payment. For additional information refer to the IRS Payband System Pay Administration Guidance on the Payband Resource Center website at http://hco.web.irs.gov/apps/payband/index.htm.