6.575.1 IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives

Manual Transmittal

September 24, 2013

Purpose

(1) This transmits the new IRM 6.575.1, IRS Recruitment, Relocation, Retention, and Extended Assignment Incentives.

Material Changes

(1) IRM 6.575.1 provides Servicewide policy, standards, requirements, and guidance relating to the discretionary authority to provide additional, direct compensation in certain circumstances to support recruitment, relocation, and retention efforts. This IRM must be read and interpreted in accordance with pertinent law, Governmentwide regulations, Treasury Human Capital Issuance System directives, as well as applicable case law. The material in this chapter is organized consistent with the order of regulations contained in 5 CFR 575.

Effect on Other Documents

This IRM is new. It supersedes all previously published sections of IRM 6.500.1 Pay Administration, that apply to recruitment and, relocation bonuses, and retention allowances. This IRM also supersedes policies HCO 06-0911-002, Recruitment Incentive Plan; HCO 06-0809-003, Relocation Incentive Plan; HCO 06-0809-004, Retention Incentive Plan; and HCO 80, Extended Assignment Incentive Plan. This IRM incorporates the OPM final rules on Recruitment, Relocation, and Retention Incentives published in FR 78 157, dated August 14, 2013.

Audience

All Operating Divisions and Functions

Effective Date

(09-24-2013)

Karen Becton-Johnson
Director, Worklife, Benefits, and Engagement Division

PART A - RECRUITMENT INCENTIVES

  1. This section establishes the IRS policy and procedures for administering the recruitment incentive authority.

  2. The provisions of this policy apply to all newly appointed employees within the IRS, plus the following positions approved by the Office of Personnel Management (OPM) at the request of the Department of the Treasury:

    1. A position of the National Taxpayer Advocate, IRS, appointed and compensated under section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1102(a) of the IRS Restructuring and Reform Act (IRSRRA) of 1998. OPM approved coverage on August 8, 1998.

    2. A position appointed and compensated under the IRS broadbanding system as established by IRSRRA of 1998 and 5 U.S.C. 9509 as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000.

Definitions

  1. The definitions used in this chapter are consistent with those contained in 5 CFR 575.102.

  2. Competencies are the knowledge, skills, abilities, behaviors, and other characteristics an individual needs to perform the duties of the position.

  3. Likely to be difficult to fill means the IRS is likely to have difficulty recruiting qualified candidates with the competencies required for a position or group of positions in the absence of a recruitment incentive. IRS must consider the factors in 5 CFR 575.106(b), as applicable to the case at hand, to determine whether a position is likely to be difficult to fill.

    Note:

    IRS may pay all or part of a recruitment incentive to a newly appointed individual who has not yet entered on duty once he or she has signed a written service agreement under 5 CFR 575.110.

  4. Rate of basic pay is defined under 5 CFR 575.102. It includes any special rate under 5 CFR part 530, subpart C, or similar payment under other legal authority, and any locality-based comparability payment under 5 CFR part 531, subpart F, or similar payment under other legal authority, but excludes additional payments of any other kind.

IRS Recruitment Incentive Policy

  1. A recruitment incentive may be authorized on a case-by-case basis to a newly appointed employee when the employee’s position is likely to be difficult to fill in the absence of the incentive. The requesting office must make the determination to pay a recruitment incentive before the prospective employee enters on duty in the position for which recruited.

  2. The regulations contained in 5 CFR 575, subpart A provide for approval of recruitment incentives for a group or category of employees if the IRS determines that a position or group of positions have been difficult to fill in the past or may be difficult to fill in the future.

    1. The embedded human capital office (HCO) must initiate contact with the HCO, Worklife, Benefits, and Engagement Division (WBE), Pay, Leave, and Performance (PLP) Branch for technical advice prior to finalizing a formal request for group recruitment incentives.

    2. All requests for group incentives must be coordinated between business units having like or similar occupations, regardless of grade levels.

    3. The category or group of positions must be narrowly defined to include: occupational series, grade level, distinctive job duties, unique competencies required for the positions, and geographic location.

    4. Changes to an approved group request (e.g., increase in number of incentives or hard-to-fill locations) will require additional written approval.

    5. The requesting office must review each decision to target a group of similar positions for the purpose of offering a recruitment incentive at least annually to determine whether the positions are still likely to be difficult to fill. If a determination is made that the positions are no longer likely to be difficult to fill, a recruitment incentive may not be offered to newly-appointed employees in that group on a group basis.

    6. The HCO, WBE, PLP Branch, will notify the Department of the Treasury Office of the Director of Human Capital Strategic Management of approved group recruitment incentives and include the positions covered, service period, amount of payment, and effective date of the incentive.

Criteria for Consideration of a Recruitment Incentive

  1. The Department of the Treasury and the IRS retain sole and exclusive discretion, subject only to OPM review and oversight, to determine it is likely to have difficulty recruiting candidates with the competencies required for the position (or group of positions) in the absence of a recruitment incentive. The following factors must be considered, as applicable to the case at hand, in determining whether a position (or group of positions) is likely to be difficult to fill in the absence of the incentive and in documenting this determination (5 CFR 575.106):

    1. The availability and quality of candidates possessing the competencies required for the position, including the success of recent efforts to recruit candidates for similar positions using indicators such as offer acceptance rates, the proportion of positions filled, and the length of time required to fill similar positions;

    2. The salaries typically paid outside the Federal Government for similar positions;

    3. Recent turnover in similar positions;

    4. Employment trends and labor-market factors that may affect our ability to recruit candidates for similar positions;

    5. Special or unique competencies required for the position;

    6. Efforts to use non-pay authorities, such as special training and work scheduling flexibilities, to resolve difficulties alone or in combination with a recruitment incentive;

    7. The desirability of the duties, work or organizational environment, or geographic location of the position; and

    8. Other supporting factors.

  2. The IRS may determine that a position (or group of positions) is likely to be difficult to fill if OPM has approved the use of a direct-hire authority applicable to the position (or group of positions) under 5 CFR 337, subpart B.

Approval of Recruitment Incentives

  1. The Department of the Treasury Assistant Secretary for Management is the approving official for payment of a recruitment incentive to a member of the Senior Executive Service (SES), or non-SES employees selected for an SES position, other than one for whom appointing authority is reserved to the Deputy Secretary.

  2. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of a recruitment incentive for employees within his or her respective organization. This authority may not be redelegated.

  3. The approving official must be at least one level higher than the employee's supervisor unless there is no higher official.

  4. The approving official must review and approve the recruitment incentive request in writing before the new employee enters on duty.

Eligibility

  1. To be eligible to receive a recruitment incentive, an employee must:

    1. be a newly-appointed employee; and

    2. sign a service agreement to remain an employee of the IRS for a period of 6 months to 4 years as established by the approving official based on the needs of the IRS. While service agreement time frames vary, a 1-year period is recommended for entry-level positions.

  2. A recruitment incentive may not be paid to ineligible employees as defined in 5 CFR 575.104 - which include individuals appointed by the President, by and with the advice and consent of the Senate, or a position in the SES as a noncareer appointee (as defined in 5 U.S.C. 3132(a)(7)).

Responsibilities

  1. The recruiting manager recommends payment of a recruitment incentive through the second-level manager after determining a position is likely to be difficult to fill.

  2. The requesting office completes, and signs, the Recruitment Incentive Request Form 14118-I for non-SES employees, or the Recruitment Incentive Template for SES employees, or non-SES employees selected for an SES position. Requests for non-SES employees are routed to the embedded HCO, and requests for SES employees are routed to the functional point of contact (POC).

  3. The embedded HCO or functional POC:

    1. reviews the request;

    2. obtains signature of the Division Commissioner, Deputy Division Commissioner, Chief Officer, Deputy Chief Officer, or equivalent official, and;

    3. forwards the request to HCO, WBE, PLP Branch for non-SES, and the HCO, Office of Executive Services (OES) for SES.

  4. The HCO, WBE, PLP Branch will conduct a technical review on non-SES requests, and the OES will conduct a technical review on SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval, and the requests for SES will be forwarded to the Treasury Assistant Secretary for Management.

  5. Agency-Wide Shared Services (AWSS) processes the personnel action requests and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s Official Personnel Folder.

  6. At the request of HCO, WBE, PLP Branch, AWSS will generate periodic reports on recruitment incentives.

  7. The HCO, WBE, PLP Branch, is responsible for overall program administration, policy guidance, and reporting requirements.

Documentation

  1. For each determination to pay a recruitment incentive, the following must be documented in writing on the Recruitment Incentive Request Form 14118-I for non-SES employees, or the Recruitment Incentive Template for SES employees, or non-SES employees selected for an SES position:.

    1. The basis for determining that a position is likely to be difficult to fill as determined under IRM 6.575.1.1.3;

    2. The basis for authorizing a recruitment incentive;

    3. The basis for the amount and timing of the incentive payment and the length of the required service period; and

    4. If applicable, the basis for making a determination to pay a recruitment incentive before a prospective employee enters on duty in the position for which recruited (the employee must have signed the service agreement).

Determining the Amount of the Recruitment Incentive

  1. For SES, the maximum amount authorized for a recruitment incentive is 25 percent of an employee’s annual rate of basic pay at the beginning of the service period.

  2. For non-SES, the parameters established in the IRS Corporate Incentives Strategy must be referenced and utilized. A copy of the strategy can be obtained by contacting your embedded HCO.

  3. The following factors must be considered to determine the amount of the recruitment incentive:

    1. The criticality of the skills or special mission requiring the service of a specific executive, manager, employee, or group of employees;

    2. The cost effectiveness of granting a recruitment incentive relative to the cost of further recruitment (e.g., training, lost productivity, attrition rate, and other applicable alternatives and considerations);

    3. The availability of funds.

  4. The IRS may request that OPM waive the limitation an employee or group of employees based on a critical agency need. The requesting office must determine that the competencies required for the position(s) are critical to the successful accomplishment of an important agency mission, project, or initiative (e.g., programs or projects related to a national emergency or implementing a new law or critical management initiative). With an approved waiver, the total amount of recruitment incentive payments paid to an employee in a service period may not exceed 50 percent of the employee’s annual rate of basic pay at the beginning of the service period multiplied by the number of years in the service period. However, in no event may a waiver provide total recruitment incentive payments exceeding 100 percent of the employee’s annual rate of basic pay at the beginning of the service period.

Payment of a Recruitment Incentive

  1. A recruitment incentive may be paid:

    1. as an initial lump-sum payment at the commencement of the service period required by the service agreement; or before the start of the service period to an employee who has not yet entered on duty once the employee has signed a service agreement;

    2. in installments throughout the service period required by the service agreement;

    3. as a final lump-sum payment upon the completion of the full service period required by the service agreement; or

    4. in a combination of these payment methods.

  2. A recruitment incentive is not part of an employee’s rate of basic pay for any purpose.

  3. A recruitment incentive will not be included in the calculation of a lump-sum payment for annual leave.

Service Agreement

  1. A service agreement is a written agreement between IRS and an employee under which the employee agrees to a specified period of employment in return for payment of a recruitment incentive.

  2. Before paying a recruitment incentive, an employee must sign a written service agreement to complete a specified period of employment with the IRS at the duty station. The minimum service agreement may not be for less than 6 months; the maximum service agreement may not be for more than 4 years.

  3. The service agreement must meet the requirements of, and contain the information specified in 5 CFR 575.110.

  4. The service agreement must include the commencement and termination dates of the required service period.

  5. If service at the duty station does not begin on the first day of a pay period, the approving official must delay the service period commencement date so that the required service period begins on the first day of the first pay period beginning on or after the commencement of service with the IRS.

  6. The approving official may delay a service agreement commencement date until after the employee completes an initial period of formal training or required probationary period when continued employment in the position is contingent on successful completion of the formal training or probationary period.

  7. The determination to pay a recruitment incentive must be made before the employee enters on duty in the position. However, the service agreement must specify that if an employee does not successfully complete the training or probationary period before the service period commences, the IRS is not obligated to pay any portion of the recruitment incentive to the employee.

  8. A service agreement form is provided as part of Form 14118-I Request for Recruitment Incentive.

Termination of a Service Agreement

  1. The officials authorized to approve the payment of a recruitment incentive are also authorized to terminate the agreement.

  2. The IRS may unilaterally terminate a recruitment incentive service agreement based solely on management needs (5 CFR 575.111(a)). If the decision is made to unilaterally terminate a recruitment incentive service agreement, the employee is entitled to all the recruitment incentive payments for completed service and to retain any portion of the recruitment incentive payment he or she received that is attributable to uncompleted service.

  3. The IRS must terminate a recruitment incentive service agreement as prescribed under 5 CFR 575.111(b) if the employee is demoted or separated for cause (i.e., for unacceptable performance or conduct), receives a rating of record of less than “fully successful” or equivalent, or otherwise fails to fulfill the terms of the service agreement. If the IRS terminates a recruitment incentive service agreement based on these reasons, the following rules apply:

    1. The employee is entitled to retain the recruitment incentive payments previously paid that are attributable to the completed portion of the service period.

    2. If the payments received are less than the amount that would be attributable to the completed portion of the service period, or if the payments are more than the amount that would be attributable to the completed portion of the service period, the IRS must follow the requirements in 5 CFR 575.111(f) to determine its obligations for payment or the employee’s obligations for repayment.

      Note:

      An employee is not entitled to retain any portion of the recruitment incentive and must repay all payments received when the employee is separated as a result of material false or inaccurate statements or deception or fraud in examination or appointment or fails to meet employment qualifications.

    3. The IRS must notify an employee in writing when it terminates a recruitment incentive agreement and provide the reason(s) for the termination.

    4. The termination of a service agreement and payment of the incentive is not grievable or appealable as prescribed under 5 CFR 575.111(c).

Relation to Other Incentives

  1. The IRS may not begin paying a recruitment incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a relocation incentive under 5 CFR 575.206 or for a retention incentive under 5 CFR.575.306, or to an eligible employee who is receiving a retention incentive without a service agreement (5 CFR 575.105(c)).

  2. The IRS may not begin paying an extended assignment incentive under 5 CFR Part 575, subpart E, to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment, relocation, or retention incentive (5 CFR 575.506(b)).

Collection of Excess Payments

  1. If an employee fails to fulfill his or her obligations for repayment, the IRS must recover any outstanding incentive repayment amount from the employee consistent with the IRS's policies and procedures for collection by offset from an indebted Government employee under 5 U.S.C. 5514 and 5 CFR Part 550, subpart K, or the appropriate provisions governing Federal debt collection if the individual is no longer a Federal employee (5 CFR 575.111(g)).

  2. Authorized officials may waive the requirement to repay the excess amount when, in the judgment of the official, collection of the excess amount would be against equity and good conscience and not in the best interest of the United States (5 CFR 575.111(h)). Any waivers must be consistent and in accordance with the provisions of Treasury Directive 34-01, Waiving Claims Against Treasury Employees for Erroneous Payments.

Records, Review, Reports

  1. The HCO, WBE, PLP Branch will:

    1. maintain a record of each determination to pay a recruitment incentive, and

    2. complete and submit a written report to the Department of the Treasury on recruitment incentive use during the previous calendar year.

Miscellaneous Provisions

  1. Aggregate Limitation: Payment of a recruitment incentive is subject to the aggregate limitation on pay under 5 U.S.C. 5307 and 5 CFR Part 530, subpart B. The total annual compensation (including a recruitment, relocation, or retention incentive payment) for SES cannot exceed the rate payable to the Vice President under 3 U.S.C. 104 during periods when OPM and OMB certification of the Department’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of the Department’s SES performance appraisal system has lapsed.as follows:

    1. During periods when certification is in effect: If an incentive would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, the IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year.

    2. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, the IRS must: (1) defer the excess amount until OPM and OMB certify the Department’s SES performance appraisal system, at which time the IRS may pay the excess amount up to the rate payable to the Vice President and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify the Department’s SES performance appraisal system before the end of the current calendar year.

    3. The limitations above also apply to employees in senior-level (SL) positions and scientific and professional (ST) positions who are paid under 5 U.S.C. 5376.

    4. Other Employees: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204.

PART B –RELOCATION INCENTIVES

  1. This section establishes the IRS policy and procedures for administering the relocation incentive authority.

  2. The provisions of this policy apply to employees as defined under 5 U.S.C. 5753 and 5 CFR 575.202 within the IRS, plus the following positions approved by the Office of Personnel Management (OPM) at the request of the Department of the Treasury:

    1. A position of the National Taxpayer Advocate, IRS, appointed and compensated under Section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1102(a) of the IRS Restructuring and Reform Act (IRSRRA) of 1998 . OPM approved coverage on August 8, 1998.

    2. A position appointed and compensated under the IRS broadbanding system as established by IRSRRA of 1998 and 5 U.S.C. 9509 as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000.

Definitions

  1. The definitions used in this chapter are consistent with those contained in 5 CFR 575.202.

  2. Competencies are the knowledge, skills, abilities, behaviors, and other characteristics an employee needs to perform the duties of the position.

  3. Likely to be difficult to fill means the IRS is likely to have difficulty recruiting employees with the competencies required for the position or group of positions in the absence of a relocation incentive. IRS must consider the factors in 5 CFR 575.206(b), as applicable to the case at hand, to determine whether a position is likely to be difficult to fill.

  4. Rate of Basic Pay is defined under 5 CFR 575.202. It includes any special rate under 5 CFR Part 530, subpart C, or similar payment under other legal authority, and any locality-based comparability payment under 5 CFR Part 531, subpart F, or similar payment under other legal authority, but excludes additional payments of any other kind.

  5. Position in a different geographic area. A position is considered to be in a different geographic area if the worksite of the new position is 50 or more miles from the worksite of the position held immediately before the move. If the worksite of the new position is less than 50 miles from the worksite of the position held immediately before the move, but the employee must relocate (i.e., establish a new residence) to accept the position, the approving official may waive the 50-mile requirement and pay the employee a relocation incentive.

IRS Relocation Incentive Policy

  1. The IRS may pay a relocation incentive to an employee who:

    1. relocates to a different geographic area (permanently or temporarily) to accept a position when the position is likely to be difficult to fill, as determined under 5 CFR 575.206; and

    2. is an employee of the Federal government immediately before the relocation.

  2. A relocation incentive may be paid only when the employee’s rating of record immediately before the move is at least ‘‘fully successful’’ or equivalent. To continue to receive a relocation incentive, an eligible employee must continue to have a rating of at least “fully successful” or equivalent.

Criteria for Consideration of a Relocation Incentive

  1. The Department of the Treasury and the IRS retains sole and exclusive discretion, subject only to OPM review and oversight, to determine when a position is likely to be difficult to fill. The following factors must be considered, as applicable to the case at hand, in determining whether a position (or group of positions) is likely to be difficult to fill in the absence of a relocation incentive:

    1. The availability and quality of candidates possessing the competencies required for the position, including the success of recent efforts to recruit candidates for the position or similar positions using indicators such as offer acceptance rates, the proportion of positions filled, and the length of time required to fill similar positions;

    2. The salaries typically paid outside the Federal Government for similar positions;

    3. Recent turnover in similar positions;

    4. Employment trends and labor-market factors that may affect the ability of the IRS to recruit candidates for similar positions;

    5. Special or unique competencies required for the position;

    6. Agency efforts to use non-pay authorities, such as special training and work scheduling flexibilities, to resolve difficulties alone or in combination with a relocation incentive;

    7. The desirability of the duties, work or organizational environment, or geographic location of the position; and,

    8. Other supporting factors.

  2. The IRS may determine that a position (or group of positions) is likely to be difficult to fill if OPM has approved the use of a direct-hire authority applicable to the position (or group of positions) under 5 CFR part 337, subpart B.

  3. The regulations provide for approval of a group relocation incentive. The embedded human capital office (HCO) must initiate contact with the HCO, Worklife, Benefits, and Engagement Division (WBE), Pay, Leave, and Performance (PLP) Branch for technical advice prior to finalizing a formal request for group relocation incentives.

  4. The IRS may waive the required case-by-case authorization of a relocation incentive when: (1) an employee is a member of a group of employees subject to a mobility agreement and the IRS determines that relocation incentives are necessary to retain the employees subject to the mobility agreement to ensure continuation of operations; or (2) A major organizational unit of IRS is relocated to a new duty station, and the IRS determines that relocation incentives are necessary for a group of employees to ensure the continued operation of that unit without undue disruption of an activity or function that is deemed essential to the IRS’s mission or without undue disruption of service to the public.

  5. The written determination of the basis to pay a relocation incentive must specify the group of employees covered by the case-by-case waiver, the conditions under which the waiver is approved, and the period of time the waiver is applied.

  6. The category or group of positions must be narrowly defined to include: occupational series, grade level, distinctive job duties, unique competencies required for the position, special project, function or activity, minimum service requirements, organization or team geographic location.

  7. The HCO, WBE, PLP Branch, will notify the Department of the Treasury Director of Human Capital Strategic Management of approved group relocation incentives. The notification must include information on the positions covered, service period, amount of payment, and effective date of the incentive.

Approval of Relocation Incentives

  1. The Department of the Treasury Assistant Secretary for Management is the approving official for payment of a relocation incentive to a member of the Senior Executive Service (SES), or non-SES employees selected for an SES position, other than one for whom appointing authority is reserved to the Deputy Secretary.

  2. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of a relocation incentive for employees within his or her respective organization. This authority may not be redelegated.

  3. The approving official must be at least one level higher than the employee's supervisor, unless there is no higher official.

  4. The approving official must review and approve the relocation incentive request in writing before the employee enters on duty in the new position and before the incentive can be paid to the employee.

Eligibility

  1. To be eligible to receive a relocation incentive, an employee must:

    1. have a fully successful or equivalent rating of record on the most recent annual performance appraisal;

    2. sign a service agreement (Form 14065-B, for non-SES or Service Agreement Template for SES), to remain an employee of the IRS a minimum of 6 months not to exceed 4 years; and,

    3. not be fulfilling a service agreement for receipt of a previously approved recruitment or relocation incentive.

  2. Employees in positions listed in 5 CFR 575.204 - which include Presidential appointees, non-career SES appointees, and employees in positions excepted from the competitive service by reason of their confidential, policy-determining, policy-making, and policy-advocating character (Schedule C) - are not eligible for a relocation incentive.

Responsibilities

  1. The requesting manager recommends payment of a relocation incentive through the second-level manager.

  2. The requesting office completes, and signs, the Relocation Incentive Request Form 14064-B for non-SES employees, or the Relocation Incentive Template for SES employees, or non-SES employees selected for an SES position. Requests for non-SES employees are routed to the embedded HCO, and requests for SES employees are routed to the functional point of contact (POC).

  3. The embedded HCO or functional POC:

    1. reviews the request,

    2. forwards for signature by the Division Commissioner, Deputy Division Commissioner, Chief Officer, Deputy Chief Officer, or equivalent official, and

    3. forwards the request to HCO, WBE, PLP Branch, for non-SES employees, and the HCO, Office of Executive Services (OES) for SES employees.

  4. The HCO, WBE, PLP Branch will conduct a technical review on non-SES requests, and the OES will conduct a technical review on SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval, and the requests for SES will be forwarded to the Treasury Assistant Secretary for Management.

  5. Agency-Wide Shared Services (AWSS) processes the personnel action requests and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s Official Personnel Folder.

  6. At the request of HCO, WBE, PLP Branch, AWSS will generate periodic reports on relocation incentives.

  7. The HCO, WBE, PLP Branch, is responsible for overall program administration, policy guidance, and reporting requirements.

Documentation

  1. For each determination to pay a relocation incentive, the following must be documented in writing on the Relocation Incentive Request Form 14064-B for non-SES employees, or the Relocation Incentive Template for SES employees, or non-SES employees selected for an SES position:

    1. The basis for determining that a position is likely to be difficult to fill as determined under 6.575.1.2.3;

    2. The basis for authorizing a relocation incentive;

    3. The basis for the amount and timing of the relocation incentive payment, and the length of the required service period; and

    4. That the worksite of the employee’s new position is not in the same geographic area as the worksite of the position held immediately before the move (or that a waiver was approved under 5 CFR 575.205(b)).

Determining the Amount of the Relocation Incentive

  1. For SES, the maximum amount authorized for a relocation incentive is 25 percent of an employee’s annual rate of basic pay at the beginning of the service period.

  2. For non-SES, the parameters established in the IRS Corporate Incentives Strategy must be referenced and utilized. A copy of the strategy can be obtained by contacting your embedded HCO.

Payment of a Relocation Incentive

  1. A relocation incentive may be paid:

    1. as an initial lump-sum payment at the commencement of the service period required by the service agreement;

    2. in installments throughout the service period required by the service agreement;

    3. as a final lump-sum payment upon the completion of the full service period required by the service agreement; or,

    4. in a combination of these payment methods.

  2. A relocation incentive will not be considered part of the employee's rate of basic pay for any purpose.

  3. Payment of a relocation incentive is subject to the aggregate limitation on pay under 5 CFR part 530, subpart B.

  4. A relocation incentive will not be included in the calculation of a lump-sum payment for annual leave.

  5. The IRS may request OPM approval to waive the 25 percent relocation incentive payment limitation based on the IRS’s critical need for a higher incentive payment amount consistent with the requirements in 5 CFR 575.209(c)(1). The total amount of the higher payment may not exceed 50 percent of the employee’s annual rate of basic pay at the beginning of a service period. The total payment may not in any event exceed 100 percent of the employee’s annual rate of basic pay at the beginning of the service period. A written waiver request must include all of the information required in 5 CFR 575.209(c)(2).

  6. In all cases, an employee must establish residence in the new geographic area before the IRS may pay a relocation incentive to the employee.

  7. A relocation incentive may be paid only if the employee maintains residency in the new geographic area for the duration of the service agreement.

Service Agreement

  1. A service agreement is a written agreement between the IRS and an employee under which the employee agrees to a specified period of employment of not less than 6 months and not more than 4 years at the new duty station to which relocated in return for payment of a relocation incentive.

  2. The service agreement must meet the requirements of, and contain the information specified in 5 CFR 575.210.

  3. The service agreement must include the commencement and termination dates of the required service period.

  4. The required service period must begin upon the commencement of service at the new duty station. If service at the new duty station does not begin on the first day of a pay period, the approving official must delay the service period commencement date so that the required service period begins on the first day of the first pay period beginning on or after the commencement of service at the new duty station.

  5. The approving official may delay a service agreement commencement date until after the employee completes an initial period of formal training when continued employment in the position is contingent on successful completion of the formal training. However, the service agreement must specify that if an employee does not successfully complete the training before the service period commences, the agency is not obligated to pay any portion of the relocation incentive to the employee.

  6. The service agreement must specify the total amount of the incentive, the method of paying the incentive, and the timing and amount of each incentive payment, as established under 5 CFR 575.209.

  7. The service agreement must include the conditions under which the agency must terminate the service agreement (i.e., if an employee is demoted or separated for cause, receives a rating of record of less than ‘‘Fully Successful’’ or equivalent, fails to maintain residency in the new geographic area for the duration of the service agreement, or otherwise fails to fulfill the terms of the service agreement) and the conditions under which the employee must repay a relocation incentive under § 575.211.

  8. The requesting office must define the limits of the new geographic area in the service agreement for the purpose of determining whether an employee maintains residency in that geographic area for the duration of the service agreement.

Termination of a Service Agreement

  1. The officials authorized to approve the payment of a relocation incentive are also authorized to terminate the agreement.

  2. The IRS may unilaterally terminate a relocation incentive service agreement based solely on management needs (5 CFR 575.211(a)). If the decision is made to unilaterally terminate the relocation incentive service agreement, the employee is entitled to all the relocation incentive payments for completed service and to retain any portion of the relocation incentive payment he or she received that is attributable to uncompleted service.

  3. The IRS must terminate a relocation incentive service agreement if an employee is demoted or separated for cause (i.e., for unacceptable performance or conduct), if the employee receives a rating of record (or an official performance appraisal or evaluation under a system not covered by 5 U.S.C. chapter 43 or 5 CFR part 430) of less than ‘‘Fully Successful’’ or equivalent, if the employee fails to maintain residency in the new geographic area for the duration of the service agreement, or if the employee otherwise fails to fulfill the terms of the service agreement. If the IRS terminates a relocation incentive service agreement based on these reasons, the following rules apply:

    1. The employee is entitled to retain the relocation incentive payments previously paid that are attributable to the completed portion of the service period.

    2. If the payments received are less than the amount that would be attributable to the completed portion of the service period, or the payments are more than the amount that would be attributable to the completed portion of the service period, the IRS must follow the requirements in 5 CFR 575.211(f) to determine IRS's obligations for payment or the employee’s obligations for repayment.

  4. The IRS must notify an employee in writing when it terminates a relocation incentive agreement and provide the reason(s) for the termination.

  5. The termination of a service agreement and payment of the incentive is not grievable or appealable as prescribed under 5 CFR 575.211(c).

Relation to Other Incentives

  1. The IRS may not begin paying a relocation incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment incentive under 5 CFR 575.106, or for the payment of a relocation incentive previously authorized under 5 CFR 575.206 (5 CFR 575.205(d)).

  2. A relocation incentive may commence during a period of employment established under a service agreement for a previously authorized retention incentive. The service period for the relocation and retention incentive service agreements must be fulfilled concurrently (5 CFR 575.205(e)).

  3. The IRS may not begin paying an extended assignment incentive under 5 CFR Part 575, subpart E, to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment, relocation, or retention incentive (5 CFR 575.506(b)).

Collection of Excess Payments

  1. If an employee fails to fulfill his or her obligations for repayment, the IRS must recover any outstanding incentive repayment amount from the employee consistent with IRS’s policies and procedures for collection by offset from an indebted Government employee under 5 U.S.C. 5514 and 5 CFR Part 550, subpart K, or the appropriate provisions governing Federal debt collection if the individual is no longer a Federal employee (5 CFR 575.211(g)).

  2. Authorized officials may waive the requirement to repay the excess amount when, in judgment of the official, collection of the excess amount would be against equity and good conscience and not in the best interest of the United States (5 CFR 575.211(h)). Any waivers must be consistent and in accordance with the provisions of Treasury Directive 34-01, Waiving Claims Against Treasury Employees for Erroneous Payments.

Records, Review, Reports

  1. The HCO, WBE, PLP Branch will:

    1. maintain a record of each determination to pay a relocation incentive, and

    2. complete and submit a written report to Treasury on relocation incentive use during the previous calendar year.

Miscellaneous Provisions

  1. Aggregate Limitation: Payment of a relocation incentive is subject to the aggregate limitation on pay under 5 U.S.C. 5307 and 5 CFR Part 530, subpart B, as follows:

    1. SES: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate payable to the Vice President under 3 U.S.C. 104 during periods when OPM and OMB certification of the Department’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of the Department’s SES performance appraisal system has lapsed.

      1. During periods when certification is in effect: If an incentive payment would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, the IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year.

      2. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, the IRS must: (1) defer the excess amount until OPM and OMB certify the Department’s SES performance appraisal system, at which time the IRS may pay the excess amount up to the Vice President’s rate of pay and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify the Department’s SES performance appraisal system before the end of the current calendar year.

    2. Other Employees:Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204.

PART C –RETENTION INCENTIVES

  1. This section establishes the IRS policy and procedures for administering the retention incentive authority.

  2. The provisions of this policy apply to employees as defined under 5 U.S.C. 5753 and 5 CFR 575.302 within the IRS, plus the following positions approved by the Office of Personnel Management (OPM) at the request of the Department of the Treasury:

    1. A position of the National Taxpayer Advocate, IRS, appointed and compensated under Section 7803(c)(I)(B) of the Internal Revenue Code of 1986, as amended by Section 1102(a) of the IRS Restructuring and Reform Act (IRSRRA) of 1998. OPM approved coverage on August 8, 1998.

    2. A position appointed and compensated under the IRS broadbanding system as established by IRSRRA of 1998 and 5 U.S.C. 9509 as provided under OPM’s Criteria for IRS Broadbanding System, effective December 19, 2000.

Definitions

  1. The definitions used in this chapter are consistent with those contained in 5 CFR 575.302.

  2. Competencies are the knowledge, skills, abilities, behaviors, and other characteristics an employee needs to perform the duties of the position.

  3. Likely to leave Federal service means the agency has determined that, in the absence of a retention incentive, an employee or group of employees is likely to leave the Federal Service or an employee has notified the agency that he or she will leave the Federal Service.

  4. Rate of basic pay is defined under 5 CFR 575.302. It includes any special rate under 5 CFR Part 530, subpart C, or similar payment under other legal authority, and any locality-based comparability payment under 5 CFR Part 531, subpart F, or similar payment under other legal authority, but excludes additional payments of any other kind.

IRS Retention Incentive Policy

  1. An employee may be considered for a retention incentive if:

    1. the unusually high or unique qualifications (i.e., competencies) of the employee, or a special need for the employee’s services, make it essential to retain the employee; and

    2. the employee would be likely to leave the Federal service in the absence of a retention incentive.

  2. The statute and regulations provide for approval of a group or category of employees if the agency determines that:

    1. the unusually high or unique qualifications (i.e., competencies) of the group or category of employees, or a special need of the IRS for the employees’ services, make it essential to retain the employees in that group or category; and

    2. there is a high risk that a significant number of the employees in the group would be likely to leave the Federal service in the absence of a retention incentive.

  3. The embedded human capital office (HCO) must initiate contact with the HCO, Worklife, Benefits, and Engagement Division (WBE), Pay, Leave, and Performance (PLP) Branch for technical advice prior to finalizing a formal request for a group incentive.

Criteria for Consideration of A Retention Incentive

  1. The Department of the Treasury and the IRS retain sole and exclusive discretion, subject only to OPM review and oversight, to:

    1. Determine when the unusually high or unique qualifications (i.e., competencies) of an employee, or a special need of the IRS for the employee’s services, make it essential to retain the employee, and when the employee would be likely to leave the Federal service in the absence of a retention incentive;

    2. Determine when a group or category of employees has unusually high or unique qualifications (i.e., competencies), or when an agency has a special need for the employees’ services, that make it essential to retain the employees in that group or category, and when there is a high risk that a significant number of employees in the group would be likely to leave the Federal service in the absence of a retention incentive;

    3. Approve a retention incentive for an employee (or group or category of employees, except as prohibited by 5 CFR 575.305(c)) in a position (or positions) listed in 5 CFR 575.303;

    4. Establish the criteria for determining the amount of a retention incentive and the length of a service period under 5 CFR 575.309 and 5 CFR 575.310, respectively;

    5. Request a waiver from OPM of the limitation on the maximum amount of a retention incentive for an employee (or group or category of employees) under 5 CFR 575.309(e); and

    6. Establish the criteria for terminating a service agreement or retention incentive payments under 5 CFR 575.311.

  2. The following factors must be considered as applicable to the case in hand before authorizing a retention incentive for an individual employee in determining whether the unusually high or unique qualifications of an employee, or a special need of the IRS for an employee’s services, make it essential to retain the employee, and that the employee would be likely to leave the Federal service in the absence of a retention incentive:

    1. Employment trends and labor market factors such as the availability and quality of candidates in the labor market possessing the competencies required for the position, and who, with minimal training, cost, or disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the employee;

    2. The success of recent efforts to recruit candidates and retain employees with competencies similar to those possessed by the employee for positions similar to the position held by the employee;

    3. Special or unique competencies required for the position;

    4. IRS efforts to use non-pay authorities to help retain the employee instead of, or in addition to, a retention incentive, such as special training and work scheduling flexibilities or improving working conditions;

    5. The desirability of the duties, work or organizational environment, or geographic location of the position;

    6. The extent to which the employee’s departure would affect the IRS’s ability to carry out an activity, perform a function, or complete a project that the IRS deems essential to its mission;

    7. The salaries typically paid outside the Federal Government;

    8. The quality and availability of the potential sources of employees that are identified in the organization's succession plan and knowledge transfer strategy, who possess the competencies required for the position, and who, with minimal training, cost, and disruption of service to the public, could perform the full range of duties and responsibilities of the employee’s position at the level performed by the employee; and,

    9. Other supporting factors.

  3. Before a group incentive may be approved, the requesting organization must determine, based upon the factors outlined above, whether a group or category of employees:

    1. Has unusually high or unique qualifications (i.e., competencies), or that the IRS’s special need for the employees’ services, make it essential to retain the employees in that category; and

    2. That it is reasonable to presume that there is a high risk that a significant number of employees in the targeted category would be likely to leave the Federal service in the absence of a retention incentive.

    3. A group incentive authorization may not include any employee covered by 5 CFR 575.303(a)(2), (a)(3), or (a)(5), or those in similar categories of positions approved by OPM to receive retention incentives under 575.303(a)(7).

    4. The business unit, or functional office must narrowly define a category or group of positions to include: occupational series, grade level, distinctive job duties, unique competencies required for the position, special project, function or activity, minimum service requirements, organization or team, and geographic location.

    5. The HCO, WBE, PLP Branch will notify the Department of the Treasury Director of Human Capital Strategic Management of approved group retention incentives. The notification must include information on the positions covered, service period, amount of payment, and effective date of the incentive.

Approval of Retention Incentives

  1. The Department of the Treasury Assistant Secretary for Management is the approving official for payment of a retention incentive to:

    1. a member of the SES, other than one for whom appointing authority is reserved to the Deputy Secretary; and

    2. an individual appointed to a position under the streamlined critical pay authority at 5 U.S.C. 9503.

  2. The Commissioner, the Deputy Commissioner for Services and Enforcement, and the Deputy Commissioner for Operations Support are the approving officials for the payment of a retention incentive for employees within his or her respective organization. This authority may not be redelegated.

  3. The approving official must be at least one level higher than the employee's supervisor, unless there is no higher official.

  4. The approving official must review and approve the retention incentive request in writing before it can be made effective and paid to the employee.

Eligibility

  1. To be eligible to receive a retention incentive, an employee must:

    1. have a fully successful or equivalent rating of record on the most recent annual performance appraisal;

    2. not be fulfilling a service agreement for receipt of a previously approved recruitment or relocation incentive; and,

    3. sign a Certification of Awareness concerning buyout ineligibility (if an employee or manager).

  2. Employees in positions listed in 5 CFR 575.304—which include Presidential appointees, non-career SES appointees, and employees in positions excepted from the competitive service by reason of their confidential, policy-determining, policy-making, and policy-advocating character (Schedule C)—are not eligible for a retention incentive.

Responsibilities

  1. The requesting manager recommends payment of a retention incentive through the second-level manager.

  2. The requesting office completes, and signs the Retention Incentive Request Form 14063-B for non-SES employees, or the Retention Incentive Template for SES employees. Requests for non-SES employees are routed to the embedded HCO, and requests for SES employees are routed to the functional point of contact (POC).

  3. The embedded HCO or functional POC:

    1. reviews the request,

    2. forwards for signature by the Division Commissioner, Deputy Division Commissioner, Chief Officer, Deputy Chief Officer, or equivalent official, and

    3. forwards the request to HCO, WBE, PLP Branch for non-SES employees, and the HCO, Office of Executive Services (OES) for SES employees.

  4. The HCO, WBE, PLP Branch will conduct a technical review on non-SES requests, and the OES will conduct a technical review on SES requests. The IRS Human Capital Officer will certify that all statutory and regulatory requirements have been met. The requests for non-SES will be forwarded to the Commissioner or appropriate Deputy Commissioner for approval, and the requests for SES will be forwarded to the Treasury Assistant Secretary for Management.

  5. Agency-Wide Shared Services (AWSS) processes the personnel action requests and sends a copy of the documentation to the OPF Consolidated Site to be filed in the employee’s Official Personnel Folder.

  6. At the request of HCO, WBE, PLP Branch, AWSS will generate periodic reports on relocation incentives.

  7. The HCO, WBE, PLP Branch, is responsible for overall program administration, policy guidance, and reporting requirements.

Documentation

  1. For each determination to pay a retention incentive, the following must be documented in writing on the Retention Incentive Request Form 14063-B for non-SES employees, or the Retention Incentive Template for SES:

    1. The basis for determining that the unusually high or unique qualifications of the employee (or group of employees), or a special need of the IRS for the employee’s (or group of employees’) services, make it essential to retain the employee(s);

    2. The basis for determining that the employee (or a significant number of employees in a group) would be likely to leave the Federal service in the absence of a retention incentive; and

    3. The basis for establishing the amount and timing of the approved retention incentive payment and the length of the required service period.

  2. The factors listed in 6.575.1.3.3(2) must also be considered when making the determination to pay a retention incentive. These factors must be addressed in writing as part of the retention incentive request.

Determining the Amount of the Retention Incentive

  1. For SES, the maximum amount authorized for a retention incentive is 25 percent of an employee’s annual rate of basic pay at the beginning of the service period. An incentive authorized for a group or category of employees may not exceed 10 percent of each employee’s rate of basic pay.

  2. For non-SES, the parameters established in the IRS Corporate Incentives Strategy must be referenced and utilized. A copy of the strategy can be obtained by contacting your embedded HCO.

Payment of a Retention Incentive

  1. An eligible employee who is receiving a retained rate of pay may also receive a retention incentive. However, the incentive payment must be based on the maximum rate for the employee’s position of record/grade and not on the retained rate of pay (5 CFR 536.307(b)).

  2. Payment of a retention incentive cannot exceed 12 months unless the retention incentive is extended through the annual recertification process.

  3. A retention incentive will not be considered part of the individual’s rate of basic pay for any purpose.

  4. A retention incentive will not be included in the calculation of a lump-sum payment for annual leave.

  5. The IRS may request OPM approval to waive the 25 percent retention incentive rate limitation based on the Service’s critical need for a higher incentive payment amount consistent with the requirements in 5 CFR 575.309(e). The total amount of the higher payment may not exceed 50 percent of the employee’s annual rate of basic pay. The written waiver request must include all of the information required in 5 CFR 575.309(e). A written service agreement is required for any employee who may receive a higher retention incentive due to a waiver of the limitation, regardless of whether biweekly payments are authorized.

Termination of a Retention Incentive

  1. The officials authorized to approve the payment of a retention incentive are also authorized to terminate the incentive.

  2. A retention incentive may be reduced or terminated at any time. When a retention incentive is reduced or terminated, the business unit, or functional office must notify the affected employee(s) in writing. This notification must include the reason(s) for the reduction or termination. A reduction or termination of a retention incentive is not an adverse action and is, therefore, not grievable or appealable.

  3. An employee is entitled to receive any scheduled incentive payments through the end of the pay period in which written notification of termination was given or until the date of separation (if sooner).

  4. The business unit, or functional office, must initiate a timely Personnel Action Request to terminate or reduce the amount of a retention incentive.

  5. A retention incentive must be terminated if the employee is demoted or separated for cause (i.e., for unacceptable performance or conduct), receives a rating of less than fully successful or equivalent, or otherwise fails to fulfill the terms of the service agreement.

Position Changes

  1. An authorized official must reduce or terminate a retention incentive authorization when no service agreement is required whenever conditions change such that the original determination to pay the retention incentive no longer applies (e.g., the business unit or functional office assigns the employee to a different position that is not within the terms of the original determination) or when payment is no longer warranted at the level originally approved.

Service Agreements

  1. A service agreement is a written agreement between the IRS and an employee in which the employee agrees to a specified period of employment in return for payment of a retention incentive.

  2. A service agreement is not required when payments are made:

    1. in biweekly installments at the full incentive percentage rate established for the employee; and

    2. the incentive percentage amount established for the employee is set at or below the 25 percent cap for individual authorizations or the 10 percent cap for a group of employees.

Relation to Other Incentives

  1. The IRS may not begin payment of a retention incentive to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment or relocation incentive (5 CFR 575.309(g)(1)).

  2. The IRS may not begin paying an extended assignment incentive under 5 CFR Part 575, Subpart E, to an eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment, relocation, or retention incentive (5 CFR 575.506(b)).

Annual Recertification

  1. The circumstances that supported the initial request and approval of a retention incentive must be reviewed annually. If the retention incentive is to continue, the Division Commissioner or Chief Officer must request approval for recertification during the annual recertification process. The approval authority for recertifications is the same as original requests. Instructions for the annual recertification process will be issued by the HCO in December of each year for recertification in February of the following year.

Records, Review, Reports

  1. The HCO, WBE, PLP Branch will:

    1. maintain a record of each determination to pay a retention incentive, and

    2. complete and submit a written report to Treasury on retention incentive use during the previous calendar year.

Likely to Leave For a Different Position In the Federal Service

  1. Except as provided in this section, all other requirements in this IRM apply to the approval of a retention incentive for an employee or group or category of employees who would be likely to leave for a different position in the Federal service. An authorized official as defined in 6.575.1.3.4 may approve a retention incentive as follows:

    1. For an individual employee when it is determined that given the Service’s mission requirements and the employee’s competencies, the IRS has a special need for the employee’s services that makes it essential to retain the employee in his or her current position during a period of time before the closure or relocation of the employee’s office, facility, activity, or organization and the employee would be likely to leave for a different position in the Federal service in the absence of a retention incentive.

    2. For a group or category of employees when the authorized official determines that given the Service’s mission requirements and the employees’ competencies, the IRS has a special need for the employees’ services that makes it essential to retain the employees in their current positions during a period of time before the closure or relocation of the employees’ office, facility, or organization and there is a high risk that a significant number of the employees in the group would be likely to leave for different positions in the Federal service in the absence of a retention incentive. Each group retention incentive authorized under this section may cover no more than one occupational series.

    Note:

    The IRS must have provided a general or specific notice to the employee that his or her position may or would be affected by the closure or relocation of the employee’s office, facility, activity, or organization.

  2. For each determination to pay a retention incentive under this section, the requesting office must document in writing:

    1. The basis for determining that the IRS has a special need for the employee’s (or group of employees) services that makes it essential to retain the employee(s), based on the business needs and the employee(s) competencies during a period of time before the closure or relocation of the employee’s (or group of employees’) office, facility, activity, or organization;

    2. The basis for determining, in the absence of a retention incentive, the employee(s) would be likely to leave for a different position in the Federal service; and

    3. The basis for establishing the amount and timing of the approved retention incentive payment and the length of the required service period.

  3. For an individual employee, the requesting office must address each of the factors listed in 5 CFR 575.315(d)(2) when documenting the determinations. For a group or category of employees, the requesting office must address each of the factors listed in 5 CFR 575.315(d)(3) when documenting the determinations.

  4. Unless the retention incentive is paid in biweekly payments, the authorized IRS official must require an employee who would be likely to leave for a different position in the Federal service to sign a service agreement:

    1. The service agreement may not extend beyond the date on which the employee’s position is actually affected by a relocation or closure, and

    2. The service agreement must include the conditions under which the IRS must terminate the service agreement and the conditions under which the IRS will pay an additional payment for partially completed service.

  5. An authorized IRS official may not pay retention incentive payments in biweekly installments at the full retention incentive percentage rate. The impacted office will need to consider options to pay all or a significant portion of the retention incentive at the end of the full period of service required by the service agreement to maximize the effectiveness of the retention incentive to retain the employee (5 CFR 575.315(e)).

  6. Each determination to pay a retention incentive under this section must be reviewed at least annually to determine whether payment is still warranted. The authorized approving official must certify this determination in writing (see Annual Recertification).

  7. In addition to the conditions for terminating a service agreement, an authorized IRS official must terminate a retention incentive service agreement if:

    1. the closure or relocation is cancelled or no longer affects the employee’s position;

    2. the employee moves to another position not affected by the closure or relocation (including another position within the same agency);

    3. the employee accepts an IRS or Department of the Treasury offer to relocate with his or her office, facility, activity, or organization, and the employee is no longer likely to leave for a different position in the Federal service; and

    4. the employee moves to a different position in the same office, facility, activity, or organization subject to closure or relocation that is not covered by the employee’s service agreement. In this case, the business unit, or functional office may authorize a new retention incentive for the employee.

  8. If an authorized IRS official terminates a service agreement, the employee is entitled to retain retention incentive payments previously paid that are attributable to the completed portion of the service. If the retention incentive payments received are less than the amount that would be attributable to the completed portion of the service period, the business unit, or functional office must follow the requirements in 5 CFR 575.315(g)(4) to determine the Service’s obligations for additional payment.

  9. In addition to the records and reports required in 575.313, the IRS must submit a written report to OPM by March 31 of each year on the use of retention incentives under this section. Each report must include:

    1. the description of how the IRS used the authority to pay retention incentives during the previous calendar year to employees who would be likely to leave for a different position in the Federal service before the closure or relocation of the employee's office, facility, activity, or organization;

    2. the number and dollar amount of retention incentives paid during the previous calendar year under this section by occupational series and grade, pay level, or other pay classification;

    3. the agency to which each employee would be likely to leave in the absence of a retention incentive;

    4. each employee’s official worksite and the geographic location of the agency to which each employee would be likely to leave in the absence of a retention incentive; and

    5. other information, records, reports, and data that Treasury and/or OPM may require.

Miscellaneous Provisions

  1. Aggregate Limitation: Payment of a retention incentive is subject to the aggregate limitation on pay under 5 U.S.C. 5307 and 5 CFR Part 530, subpart B, as follows:

  2. SES: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate payable to the Vice President under 3 U.S.C. 104 during periods when OPM and OMB certification of the Department’s SES performance appraisal system is in effect and cannot exceed the rate of pay for level I of the Executive Schedule during periods when OPM and OMB certification of the Department’s SES performance appraisal system has lapsed.

    1. During periods when certification is in effect: If an incentive payment would cause an employee’s total annual compensation to exceed the Vice President’s rate of pay, the IRS must defer the excess amount for payment as a lump-sum payment to the beginning of the following calendar year.

    2. During periods when certification has lapsed: If an incentive payment would cause an employee’s total annual compensation to exceed the rate of pay for level I of the Executive Schedule, the IRS must: (1) Defer the excess amount until OPM and OMB certify the Department’s SES performance appraisal system, at which time the IRS may pay the excess amount up to the rate payable to the Vice President and defer any remaining amount for payment as a lump-sum payment at the beginning of the following calendar year; or (2) Defer the entire excess amount for payment as a lump-sum payment at the beginning of the following calendar year, if OPM and OMB do not certify the Department’s SES performance appraisal system before the end of the current calendar year.

  3. Other Employees: Total annual compensation (including a recruitment, relocation, or retention incentive payment) cannot exceed the rate of pay for level I of the Executive Schedule in any calendar year. Excess incentive payments that would cause the employee’s total annual compensation to exceed the aggregate limitation must be deferred and paid in a lump-sum payment at the beginning of the following calendar year as provided under 5 CFR 530.203(d) and 530.204.

PART D RESERVED

PART E EXTENDED ASSIGNMENT INCENTIVES

  1. This section establishes the IRS policy and procedures for administering the provisions of Extended Assignment Incentives (EAI) authority (5 U.S.C. 5757 and section 207 of Public Law 107–273, 116 Stat. 1780.5, and 5 CFR 575, subpart E).

Coverage

  1. This policy applies to all employees of the IRS except for those who are fulfilling the requirements of a service agreement for a recruitment, relocation, or retention incentive.

Impact on Other Policies and Procedures

  1. This incentive is similar to retention and relocation incentives, however, there are significant differences. The recipient of an EAI is not required to meet the standard of possessing unusually high, unique, or one-of-a-kind qualifications. The EAI provides management with a financial tool to retain experienced, well-trained employees for a longer period than the employee’s initial tour of duty, when replacing that employee would be difficult and payment of the EAI would be in the interest of the IRS.

Responsibilities

  1. The employee's manager recommends payment of an EAI through the second-level manager.

  2. The requesting office initiates and completes the EAI Worksheet and Certification Form and forwards the request to Human Capital Office (HCO) Worklife, Benefits, and Engagement Division (WBE), Pay, Leave, and Performance (PLP) Branch through the embedded HCO.

  3. The HCO, WBE, PLP Branch will conduct a technical review to ensure all statutory and regulatory requirements have been met and forwards the request to the approving official through the IRS Human Capital Officer.

  4. The approving official must be at least one level higher than the employee's supervisor unless there is no higher official.

  5. The Commissioner, the Deputy Commissioner for Services and Enforcement, or the Deputy Commissioner for Operations Support are the approving officials for payment of an EAI for employees within his or her organization.

Eligibility Requirements

  1. The determination to pay an EAI must be on a case-by-case basis. All requests must contain a written determination which addresses the following criteria:

    1. Verification that the employee has completed at least 2 years of continuous service in one or more civil service positions located in a territory or possession of the United States, the Commonwealth of Puerto Rico, or the Commonwealth of the Northern Mariana Islands;

    2. A determination that it would be difficult to replace the employee with someone else with the required qualifications and experience;

    3. A determination that it is in the interest of the Government to encourage the employee to complete a specified additional period of employment with the IRS, considering how the employee's departure would affect IRS's ability to operate efficiently or to carry out an activity or perform a function which the IRS deems essential to its mission;

    4. Verification that funds are available to pay an EAI;

    5. A detailed explanation for the need to retain the employee in one of the covered locations;

    6. How the employee’s continued service at the covered location will benefit the IRS;

    7. An explanation of the specific mission, task, and/or objective the employee will accomplish during the extension;

    8. The impact the employee’s departure will have on the IRS’s ability to continue and/or accomplish its mission; and

    9. If the employee has received an EAI payment within the last 5 years while employed with the Department of the Treasury.

  2. An EAI may not be paid to an otherwise eligible employee who is receiving or fulfilling the requirements of a service agreement for the payment of a recruitment, relocation, or retention incentive.

Payment Amount

  1. The amount of the EAI payment will be determined on a case-by-case basis. The amount will align with the IRS’s need for the employee’s qualifications and experience and the mission and objectives of the organization. The amount of the payment cannot exceed the greater of:

    1. 25 percent of the annual rate of basic pay of the employee at the beginning of the service period times the number of years (including fractions of a year) in the service period or

    2. $15,000 per year (including fractions of a year) in the service period.

Method of Payment

  1. The incentive payment will normally be paid in a lump-sum at the beginning of the service period.

  2. The incentive payment will not be considered part of the individual’s rate of basic pay for any purpose.

  3. An incentive payment may not be authorized for an individual if the payment, when added to the individual's estimated aggregate, would cause the actual aggregate received by the employee during that calendar year to exceed the rate for Level I of the Executive Schedule at the end of the same year. Any portion of the incentive not payable because of this limitation will become payable at the beginning of the next calendar year.

Maximum Service Period

  1. An employee’s total service under one or more EAI service agreements with the Department of the Treasury in a particular authorized location may not exceed 5 years.

Service Agreement

  1. The employee must sign a service agreement prior to receiving an EAI payment.

Termination of an Extended Assignment Incentive

  1. The officials authorized to approve the payment of an EAI incentive are also authorized to terminate the agreement.

  2. The IRS may unilaterally terminate a service agreement based solely on the business needs of the agency. For example, an authorized agency official may terminate a service agreement when the employee’s position is affected by a reduction in force or when there are insufficient funds to continue the planned incentive payments.

  3. If the IRS terminates a service agreement under paragraph (1) of this section, the employee is entitled to keep all incentive payments received and, if applicable, is entitled to receive any additional amount representing the difference between the amount received and the prorated share of the total incentive attributable to completed service. The employee may receive a portion or all of the incentive payment attributable to uncompleted service only to the extent provided in the service agreement.

Reports

  1. The HCO, WBE, PLP Branch will submit a written report to the Department of the Treasury no later than January 9th of each calendar year, which will include:

    1. The number of EAI agreements that commenced in each fiscal year;

    2. The dollar amount expended on EAIs each fiscal year;

    3. The number of employees who declined an EAI, by series and location;

    4. The number of employees who signed an EAI service agreement, the total amount of the planned incentive, and the total number of years of agreed-upon service, by series and location;

    5. The number of employees whose service agreements were terminated before the completion of the agreed-upon service period, and subcounts showing the number covered under 5 CFR 575.511, 575.512, and 575.513;

    6. The number of employees who incurred a repayment debt under 5 CFR 575.513 and the total amount of repayment debt incurred;

    7. Whether the use of EAIs influenced employees to stay longer than their initial tour of duty at their current duty station; and

    8. The IRS’s recommendations for changes to improve the effectiveness of EAIs.