HRDG 4500 - Recruitment and Retention Incentives - Section E

A recruitment incentive, of up to 25 percent, may be paid to a newly appointed employee employee (or group of employees) when a written determination has been made that the position is likely to be difficult to fill with a high quality candidate without the use of the incentive. It may be paid to a candidate who:

• Has received a written job offer and
• Has signed a written service agreement.

For the purposes of paying a recruitment incentive, newly appointed means:

• The first appointment to the Federal service (regardless of tenure),
• An appointment of a former employee following a break in service of at least 90 days (5 CFR 575.102), or
• An appointment as an employee of the Federal government when the employee's Federal service during the 90-day period immediately preceding the appointment was limited to one or more of the following:
• A time-limited or non-permanent appointment in the competitive or excepted service;
• A non-permanent appointment (excluding schedule C's under 5 CFR 213) in the competitive or excepted service;
• Employment with the District of Columbia (DC) government if the first appointment by the DC government was on or after October 1, 1987;
• An appointment as an expert or consultant under 5 USC 3109 and 5 CFR 304;
• Employment under a provisional appointment designated under 5 CFR 316.403; or
• Employment under the Student Career Experience Program under 5 CFR 213.3202(b).

The employee must sign a service agreement agreeing to work for the agency for a minimum of 6 months and a maximum of 4 years. If you offer an incentive for a temporary position, the appointment must be for at least 6 months (Departmental Manual [DM] 4050 - 575- 001dtd 6/21/10).

NOTE: When determining the percentage level of incentive (dollar amount), ensure that it complies with any Division, Program, Agency, and/or OPM limits. ALL paperwork must be completed and submitted to HRO for review/processing PRIOR to the employee entering on duty.

Programs may target groups of positions that have been difficult to fill in the past or may be difficult to fill in the future similar to individual incentives as described above. In order to offer a recruitment incentive to a group of employees, Programs must:

• Define, in writing, a targeted category of positions that relate to the Justification Criteria. Additional appropriate defined factors may include:
  • Occupational series
  • Grade level
  • Distinctive job duties
  • Unique competencies required for the positions and
  • Geographic location.
• Programs must review in writing, annually, the criteria in (1) above to determine whether positions are still likely to be difficult to fill. If Programs determine that the group of positions are no longer likely to be difficult to fill then the group recruitment incentive must no longer be offered to newly-appointed employees in that group on a group basis. (FR 49359 Vol.78, No.157 dtd 8/14/13)

Programs may request, in writing, a waiver to offer greater incentives based on a written determination that the competencies required to fill the positions 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). If a waiver is obtained then the total paid may not exceed 50% of the employee’s annual rate of basic pay at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service period. At no time will a waiver provide total incentive payments exceeding 100% of the employee’s annual rate of basic pay at the beginning of the service period.

Waiver requests must be forwarded to the HRD Director and:

• Describe the critical Program need that the proposed incentive would address.
• Provide the basis for determining that the position(s) is/are likely difficult to fill in the absence of an incentive.
• Provide the basis for authorizing an incentive.
• Provide the basis for the amount and timing of the approved incentive payment.
• Describe the length of the required service period.
• Address the applicable Justification Criteria.
• Provide any other information pertinent to the request.

HRD will review the request and forward it to OHRM for consideration. HRD will notify the Program of OHRM’s decision. (FR 49359 Vol. 78, No. 157 dtd 8/14/13)

A relocation incentive, of up to 25 percent of annual basic pay, may be paid when a written determination has been made that, in the absence of such an incentive, difficulty would be encountered in filling the position with a high quality employee. It may be paid to a current employee who must relocate to accept a position:

• In a different commuting or geographic area, or
• Whose duty station has changed permanently or temporarily to a different commuting area (Departmental Manual [DM] 4050 - 575 - 001 dtd 06-21-2010).

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, a waiver may be granted by the Agency.

NOTE: When determining the percentage level of incentive (dollar amount), ensure that it complies with any Division, Program, Agency, and/or OPM limits. ALL paperwork must be completed and submitted to HRO for review/processing PRIOR to the employee entering on duty.

You must make the decision to pay a Recruitment or Relocation Incentive before or after the recruitment or announcement takes place. The decision must be made, in writing, before the employee actually enters on duty in the position to which recruited or relocation (5 CFR 575.108[b] and 208[a][3] and all paperwork must be completed and forwarded to HRO prior to the employee entering on duty. The decision must be considered in addition to any decision made to reimburse the employee for relocation expenses paid under the GSA's FTR.

Neither a Recruitment incentive nor a Relocation incentive is considered to be part of the basic pay of an employee; therefore, the payment of either incentive plan has no effect on the employee's future pay entitlements such as retirement, life insurance, premium pay, etc.

Before you may pay a Relocation incentive to an employee, the employee must establish a residence (e.g., rent an apartment) in the new commuting area (5 CFR 575.205 [b]).

The employee must maintain residency in the new geographic area for the duration of the service agreement (See: 5 CFR 575.205[b]). Programs must define the limits of the new geographic area in the SA for the purpose of determining whether an employee maintains residency in that geographic area for the duration of the SA (5 CFR 575.102[d]). (FR 49359 Vol. 78, No. 157 dtd 8/14/13)

An employee receiving a relocation incentive may establish a residence in the new geographic location in several ways, including but not limited to—

• purchasing or renting of a home, apartment, or condominium;
• residing at a residence of a friend or family member; or
• temporarily residing at a hotel

The employee does not need to terminate an existing residence nor physically move his or her family, household, goods, etc. to the residence in the new geographical location in order to receive a relocation incentive. For example, the employee could retain a residence of record in a different geographic area and live in the new duty location during the work week.

In addition to establishing a residence in the new geographic location before the payment of a relocation incentive, an employee must maintain a residence in the new geographic location for the duration of the service agreement. A relocation incentive will be terminated for employees who fail to maintain a residence throughout the service agreement in the new geographic location. Periodically throughout the service agreement, employees may be required to provide proof of residence. Examples of proof of residence include a lease, proof of purchasing property, utility bill, or a similar document to ensure the employee still resides in the new location.

With written justification (see Justification Criteria below), MRP Administrators may approve the payment of relocation incentives to groups of employees (each employee must have at least a Fully Successful or equivalent rating of record):

• Who are subject to mobility agreements (requires a determination that the incentives are necessary to retain these employees), OR
• Whose function is transferred to another commuting area (requires a determination that the incentives are needed to ensure continued operations without undue disruption to an essential agency activity/function and/or without undue disruption of service to the public).

Note: In most situations, relocation incentives will be offered on a case-by-case basis.

Before an incentive may be paid your candidate or employee must sign a service agreement (SA) that lasts for a minimum of 6 months and a maximum of four (4) years agreeing to:

(1) Remain employed with the USDA agency to which recruited or successor agency in the event of a transfer of function, or
(2) Remain employed with the USDA agency at the new duty station to which relocated.
See: USDA-DM-4050-575-001 Chapter 2, Section 3, dated June 21, 2010; 5 CFR 575.110

On a case-by-case basis, you may require a candidate or employee to remain employed with the agency for up to a maximum of 4 years. In such cases, you must provide written justification (attached to the AD-1073) to the approving official for increasing the minimum period beyond the initial 6 months. When preparing your written justification consider:

• Training/orientation time for full productivity
• Unusually high incentive percentage of salary
• Exceptional labor market competition
• Work of a project nature, or
• Other exceptional circumstances.

Programs may delay the start of a SA date until after the employee completes:

• An initial period of formal training, or
• A required probationary period

When continued employment in the position is contingent on successful completion of either.

If the above is applicable, the SA must:

• Specifically state the above requirement.
• Specify that failure to complete the requirement before the service period begins will terminate the Agency's obligation to pay any portion of the incentive to the employee.

Programs may not begin a relocation incentive SA during the service period of a previously authorized relocation incentive service agreement.

A relocation incentive SA may begin during a service period established for a previously authorized retention incentive SA or while an employee received previously authorized retention incentive payments without an SA. A SA begins with the start of service with the Program, except for delays as noted above.

A service period must end on the last day of a pay period.

The service agreement must specify:

• The total amount of the incentive,
• The method of paying the incentive,
• The timing and amount of each incentive, and
• The conditions under which a recruitment or relocation incentive must be repaid.

Service Agreements must include the conditions under which the SA must be terminated, such as:

• The employee is demoted or separated for cause;
• The employee receives a rating of record of less than fully successful or equivalent;
• The employee fails to maintain residency in the new geographic area for the duration of the SA. Programs must define the limits of the new geographic area in the SA for the purpose of determining whether an employee maintains residency in that geographic area for the duration of the SA (5 CFR 575.102[d]). (FR 49359 Vol. 78, No. 157 dtd 8/14/13)
• The employee otherwise fails to fulfill the terms of the SA: or,
• Any other terms or conditions agreed to such as specification on work schedule, type of position, expected duties, and/or the creditability of time on a detail, in a nonpaid status or in a paid leave status will be creditable towards completion of the service period.

The employee is entitled to keep incentives previously paid that are attributed to the completed portion of the SA, if the termination of the agreement is due to items 1 or 2 above.

Programs may unilaterally terminate a SA based on management needs, such as:

• Reductions In Force (RIF);
• Insufficient funds to continue the planned incentive payments; or,
• An assignment of the employee to a different position that is not within the terms of the SA.

In such situations, the employee is entitled to all incentive payments for completed service and to retain any portion of incentive payments already received that is attributable to uncompleted service.

Exception: Separations due to material false or inaccurate statements, or deception or fraud in examination or appointment, or as a result of failure to meet employment qualifications, require the repayment of all recruitment incentives received under the SA.

The employee may not grieve or appeal the termination of a SA.

Service under one service agreement will run concurrently with service under any other simultaneous or subsequent service agreements in effect (OHRM 4050-575-001, Chapter 2, Section 3, d, dated 06-21-2010).

Note: There is no minimum service period for relocation incentives.

The following table compares the maximum recruitment or relocation amounts that would be payable to an employee for various service period lengths. The maximum incentive amount is calculated by multiplying the employee's annual rate of basic pay (as in effect at the beginning of the service period) x maximum incentive percentage x length of the service period. The maximum incentive an agency may authorize is 25 percent or, with OPM approval based on a critical agency need, 50 percent. At no time may an incentive exceed 100 percent of the employee's rate of basic pay.

Note: The amounts shown are the maximum incentive amounts you may pay for the stated period of service. (The maximum incentive amount under the 50 percent cap is shown in italics.) You may always choose to pay a lower incentive rate for the same period of service. (See 5 CFR 575.109 and 575.209.)

*The total amount of the recruitment or incentive may not exceed 100 percent of the employee's rate of basic pay, even when OPM approves an incentive amount that exceeds 25 percent. To determine the maximum incentive percentage for service periods greater than 2 years when OPM approves an incentive amount that exceeds 25 percent, divide 100 percent by the number of years in the service period.

** Since the incentive does not exceed 25%, OPM waiver would not be necessary.

If you voluntarily terminate your employment with the USDA agency to which recruited/relocated before the expiration of the service agreement, you must repay the incentive on a pro rata basis. The amount to be repaid will be determined by providing credit for each full month of employment you completed under the agreement.

You do not have to repay the incentive if you are involuntarily separated. "Involuntarily separated" means a separation action initiated by the Agency against your will and without your consent for reasons other than cause on charges for misconduct or delinquency. It includes a separation resulting from your actual inability to do the work following genuine efforts to do so, but does not include a separation under 5 CFR 752 or equivalent procedure that involves wrong doing on your part. If you are separated due to declination to accept a reassignment outside the commuting area, the separation is considered involuntary if your position description or other written agreement does not provide for such a reassignment. However, your separation is considered voluntary if after a written mobility agreement is added, you accept one reassignment outside the commuting area, but subsequently decline another reassignment. (5 CFR 575.111 and Departmental Manual 4050 - 575, 1-5).

Any debt owed by you will be recovered under USDA regulations for collection by offset under 5 U.S.C. 5514 and 5 CFR 550 Subpart K or through the appropriate provision governing Federal debt collection if the individual is no longer a Federal employee.

The right to recoup any debt owed by you may be waived in whole or in part by the agency head (or designee) if s/he determines that recovery would be against equity and good conscience or against the public interest.

In deciding whether to request or approve payment of a recruitment or a relocation incentive and in determining the amount to be paid, you must consider the following factors, as applicable (DM 4050 - 575, 1-7):

• The availability and quality of candidates possessing the competencies required for the position.
• The success of recent efforts to recruit high quality candidates for similar positions, including indicators such as:
  • Offer acceptance rates (job offers accepted divided by job offers made)
  • Proportion of similar positions filled (number of positions filled divided by total number of approved positions), and
  • The length of time required to fill similar positions.
    Recent turnover (number of employees hired to replace those who have quit or the ratio of this number to the number of employees) in similar positions.
• Labor-market factors that may affect the ability to recruit high quality internal or external candidates for similar positions now or in the future (may include such factors as salary ranges of comparable positions, scarcity of skills, emerging technology, etc.).
• Special or unique qualifications needed for the position.
• Funding availability.
• Positive and negative impact on the morale of current employees who have not received an incentive.
• Attractiveness of the duty station in terms of remoteness, living costs, local amenities, etc.
• For recruitment incentives, the practicality of using the Superior Qualifications Appointments (see Section D) or a Student Loan Repayment (see HRDG 4537) alone or in combination with a recruitment incentive or (5 U.S.C. 5333 and 5 CFR 531.203 [b]).
• For temporary relocations, a comparison of:
• Per diem payments for details, and
• Costs associated with temporary relocations.
• Urgency of filling the position.
• The 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.
• The desirability of the duties, work or organizational environment, or geographic location of the position.
• The approved use of a direct hire authority by OPM.

Other supporting factors that may be determined to be appropriate.

As specifically addressed in a signed service agreement, recruitment or relocation incentives may be paid as:

• An initial lump-sum payment at the start of the service period or before the employee enters on duty;
• In equal or variable Installments throughout the service period;
• A final lump-sum once the service period is fulfilled, or

A combination of any of the above.

The following positions are delegated the authority to sign AD-1073's as RO's for GS-1 through GS-15 (under 5 USC 5332 or 5305 [or similar special rate authority]) employees or prevailing rate (wage) positions (under 5 USC 5342 [a] [3] ).

Agency Administrators are delegated the authority to review and approve recruitment and relocation incentives.
This authority can only be re-delegated to the:

• Deputy Administrator for Marketing and Regulatory Programs Business Services, or
• Director, Human Resources Division.

The Secretary of Agriculture retains the authority to review and approve the payment of recruitment, relocation, and retention incentives to employees appointed:

• To a senior-level or scientific or professional position paid under 5 U.S.C. 5376;
• To a Senior Executive Service position paid under 5 U.S.C. 5383;
• To a position under the Executive Schedule established under 5 U.S.C. Chapter 5311-5317, or a position the rate of pay for which is fixed by law at a rate equal to a rate for the Executive Schedule; or

To an executive branch position filled by Presidential appointment (with or without the advice and consent of the Senate).

In addition to the record requirements on the Records/ Reports Chart in Section A, The Human Resource Office also must maintain the following information:

• Employee Name
• Organizational Title
• Annual (Starting) Salary
• Copy of Signed Justification
• Copy of the service agreement Form AD-1074, and the AD-1073.
• Written justification for increasing the minimum period of employment (if applicable).
• Percentage of salary received as an incentive.
• Amount of incentive.
• Data about appointees or candidates or employees approached in the recruitment or relocation efforts for this particular position:
  • The number who were offered a recruitment incentive or relocation incentive.
  • The percentage of salary offered as a recruitment incentive or relocation incentive to each.
  • The number who rejected the recruitment incentive or relocation incentive offered (include reasons).

HRD and OHRM will conduct periodic reviews of the use of these incentives. During these reviews, Agency Programs will be asked to provide a written evaluation of:

• The overall effect of the payment of recruitment incentives on the ability of the agency to fill key positions with high quality candidates, and
• A written evaluation of the effect of the payment of relocation incentives on the ability of the agency to fill key positions with high quality candidates and to foster geographic mobility among high quality candidates within the agency.

HRD will provide reports and data to OHRM upon request.