[Federal Register: January 27, 2005 (Volume 70, Number 17)]
[Rules and Regulations]
[Page 3858-3861]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr27ja05-2]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Part 576
RIN 3206-AJ76
Voluntary Separation Incentive Payments
AGENCY: Office of Personnel Management.
ACTION: Final rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing final
regulations on Voluntary Separation Incentive Payments (generally known
as ``VSIPs'' or ``buyouts''). These final regulations explain how an
agency requests authority from OPM to offer Voluntary Separation
Incentive Payments under the Chief Human Capital Officers Act of 2002,
which applies to most executive branch agencies.
These final regulations also explain how agencies must inform
employees returning from military leave of any Voluntary Separation
Incentive Payment offers they may have missed while on military leave.
Finally, these regulations explain how in exceptional circumstances an
agency that is hiring a former employee who previously received a
Voluntary Separation Incentive Payment may request that OPM waive the
general requirement that the individual repay the incentive if
reemployed in the Government within 5 years of receiving the incentive.
DATES: These regulations are effective January 27, 2005.
FOR FURTHER INFORMATION CONTACT: Sharon K. Ginley at (202 606-0960, fax
at (202) 606-2329, TTY at (202) 418-3134, or e-mail at
sharon.ginley@opm.gov.
SUPPLEMENTARY INFORMATION: Section 1313(a) of the Chief Human Capital
Officers Act of 2002 (Public Law 107-296; 116 Stat. 2135) added new
sections 3521 through 3525 to title 5, United States Code, to allow
executive branch agencies, at their option, to offer Voluntary
Separation Incentive Payments to employees who separate by voluntary
retirement or by resignation. On February 4, 2003, OPM issued interim
regulations to revise part 576 of title 5, Code of Federal Regulations,
with a request for public comments. These final regulations incorporate
public comments and make clarifying revisions.
To offer buyouts, an agency must submit a plan for OPM approval.
The plan must describe how the agency will use Voluntary Separation
Incentive Payments as a tool to facilitate its restructuring goals. OPM
will review each agency's plan and, in consultation with the Director
of the Office of Management and Budget (OMB), may make any appropriate
modifications to the agency's plan for Voluntary Separation Incentive
Payments. The review may include a consideration of costs and benefits
associated with using the authority. OPM will issue supplemental
guidance for agency use in preparing a VSIP implementation plan. The
agency must have OPM approval before using this flexibility.
A former employee who accepts any employment with the Government of
the United States for compensation within 5 years after the date of
separating for a Voluntary Separation Incentive Payment must repay the
entire amount of the incentive payment before the first day of
reemployment in the Federal service. Under exceptional circumstances,
and at the request of the hiring agency, the OPM Director may waive the
repayment requirement for former executive branch employees.
Comments Received
OPM received five comments from agencies concerning the interim
regulations. One agency pointed out that the interim regulations
contained the words ``* * * to offer Voluntary Separation Incentive
Payments to surplus or displaced employees.'' The agency pointed out
that the words
[[Page 3859]]
``surplus or displaced'' were not in Public Law 107-296. We agree that
the words are unnecessary, but note that they were mentioned only in
the Supplementary Information to the interim regulations, and not the
actual interim regulations themselves. We have not included those words
in the final regulations.
Two agencies disagreed with OPM's interpretation of the phrase
``currently employed for a continuous period of at least 3 years,''
which is a minimum service requirement for a Voluntary Separation
Incentive Payment. OPM's interpretation has been 3 years of continuous
employment within the same agency, and it had been included in OPM's
instructions to agencies in the use of Voluntary Separation Incentive
Payments (attached to Voluntary Separation Incentive Payment approval
letters). For purposes of clarification, in order to fall within the
coverage of section 576.101(b) of this regulation, an individual must
have 3 years of current continuous employment as an employee within the
meaning of 5 U.S.C. 2105 or 16 U.S.C. 590(h)(b)(5).
One agency expressed concern with the regulations allowing OPM, in
consultation with OMB, to modify an agency's buyout plan. They said
that the requesting agency should also be consulted before any changes
are made to its plans. Although the statute does not require OPM to
consult with the agency before modifying a plan, we agree with the
commenter, and have made the suggested change.
Two agencies expressed concern that the requirements in section
576.102(c) of the interim regulations are more restrictive than the
provisions of Public Law 107-296. Section 576.102(c) of the interim
regulations requires listings of employees by organizational unit,
geographic location, occupational category, and grade level. Public Law
107-296 requires ``* * * a description of which categories of employees
will be offered incentives.'' Of the two agencies that commented about
this section, one felt that the more detailed requirements in section
576.102(c) hamper managerial flexibility during restructuring. The
other agency expressed concern that these requirements hinder an
agency's ability to plan for restructuring (and submit requests for
buyout authority) during periods when competitive sourcing is being
studied. They pointed out that specific information about the positions
for which they intend to offer buyouts might be sensitive at that time.
Also, they said, such information might be inaccurate depending upon
whether they won or lost a bid.
In addition to the Public Law 107-296 requirement the agency cited
above, the statute also requires that agency plans identify ``the
specific positions and functions to be reduced or eliminated'' and
specifies the basis upon which employees shall be offered voluntary
incentive payments. Identifying specific positions and functions
necessarily entails identification of organizational units,
occupational series or levels, and geographic locations. OPM believes,
therefore, that its requirements are consistent with the statute and in
the best interest of the Federal Government. Requiring the specific
information about the positions for which agencies plan to offer
buyouts is the best way to ensure that agencies' buyout plans are
executed in the manner intended by the statute. Retaining the level of
position specificity shown in the interim regulations will reinforce
the fact that this is a management tool and not an employee
entitlement. In regard to the competitive sourcing comment, OPM will
work with agencies to determine the best course of action during study
periods. For these reasons, we are retaining the specific position
requirements contained in section 576.102(c) of the interim
regulations. They can be found in section 576.102(a) of the final
regulations.
Final Rule
New subpart A of 5 CFR part 576 defines the terms ``Employee'' and
``Specific Designee'' and provides additional guidance concerning
making buyout offers to employees.
New subpart B of 5 CFR part 576 discusses the term ``employment
with the Government of the United States'' for buyout repayment and
waiver of buyout repayment purposes. It indicates that personal service
contracts and other direct contracts are considered to be employment
with the Government of the United States for buyout repayment purposes.
Like other buyout recipients who accept Federal employment within 5
years of receipt of a buyout, employees working on personal service
contracts and other direct contracts are also subject to buyout
repayment if they begin working on such contracts within 5 years of
receipt of a buyout.
Regulatory Flexibility Act
I certify that this regulation will not have a significant economic
impact on a substantial number of small entities because it affects
only certain Federal employees.
Executive Order 12866, Regulatory Review
This rule has been reviewed by the Office of Management and Budget
in accordance with Executive Order 12866.
List of Subjects in 5 CFR Part 576
Government employees, Wages.
U.S. Office of Personnel Management.
Kay Coles James,
Director.
0
Accordingly, OPM amends part 576 of title 5, Code of Federal
Regulations, as follows:
0
1. Part 576 is revised to read as follows:
PART 576--VOLUNTARY SEPARATION INCENTIVE PAYMENTS
Subpart A--Voluntary Separation Incentive Payments
Sec.
576.101 Definitions.
576.102 Voluntary Separation Incentive Payment implementation plans.
576.103 Offering Voluntary Separation Incentive Payments to
employees.
576.104 Additional agency requirements.
576.105 Existing Voluntary Separation Incentive Payment authorities.
Subpart B--Waiver of Repayment of Voluntary Separation Incentive
Payments
576.201 Definitions.
576.202 Repayment requirement.
576.203 Waivers of the Voluntary Separation Incentive Repayment
requirement.
Authority: Sections 3521, 3522, 3523, 3524, and 3535 of title 5,
United States Code.
Subpart A--Voluntary Separation Incentive Payments
Sec. 576.101 Definitions.
In this part:
Employee, as defined in 5 U.S.C. 3521, means an employee as defined
under 5 U.S.C. 2105 employed by an agency and an individual employed by
a county committee established under section 8(b)(5) of the Soil
Conservation and Domestic Allotment Act (16 U.S.C. 590h(b)(5)) who--
(1) Is serving under an appointment without time limitation; and
(2) Has been currently employed for a continuous period of at least
3 years.
Specific designee means a senior officer or official within an
agency who has been specifically designated to sign requests for
authority to offer Voluntary Separation Incentive Payments for, or in
place of, the head of the agency. Examples include the Chief Human
Capital Officer, the Assistant Secretary for Administration, the
Director of Human Resources Management, or a deputy of one of these
persons.
[[Page 3860]]
Sec. 576.102 Voluntary Separation Incentive Payment implementation
plans.
(a) In accordance with section 3522(b) of title 5, United States
Code, a plan submitted by the head of an agency, or his or her specific
designee, must include:
(1) Identification of the specific positions and functions to be
reduced or eliminated, identified by organizational unit, geographic
location, occupational series, grade level and any other factors
related to the position;
(2) A description of the categories of employees who will be
offered incentives identified by organizational unit, geographic
location, occupational series, grade level and any other factors, such
as skills, knowledge, or retirement eligibility (as discussed in
implementing guidance);
(3) The time period during which incentives may be paid;
(4) The number and maximum amounts of Voluntary Separation
Incentive Payments to be offered;
(5) A description of how the agency will operate without the
eliminated or restructured positions and functions;
(6) A proposed organizational chart displaying the expected changes
in the agency's organizational structure after the agency has completed
the incentive payments;
(7) A short explanation of how Voluntary Early Retirement Authority
will be used in conjunction with separation incentives, if the agency
has requested, or will request, that authority; and
(8) A description of how Voluntary Separation Incentives offered
under another statutory authority are being used, if the agency is
offering incentives under any other statutory authority.
(b) When submitting a plan to OPM, the agency may submit either:
(1) A specific Voluntary Separation Incentive Payment
implementation plan outlining the intended use of the incentive
payments, or
(2) The agency's human capital plan, which outlines the intended
use of the incentive payments and the expected changes in the agency's
organizational structure after the agency has completed the incentive
payments. If the human capital plan is submitted, it must include the
information specified in paragraph (a) of this section.
(c) OPM will consult with the Office of Management and Budget
regarding the plan and any subsequent modifications, and will notify
the agency head in writing when the plan is approved. The review may
include a consideration of costs and benefits associated with using the
authority. If there are questions concerning the agency's plan, OPM
reserves the right to contact the agency, inform agency staff of its
concerns, and require that the agency revise the plan to bring it into
conformance with these regulations. The agency must obtain OPM approval
before offering incentives under this authority.
Sec. 576.103 Offering Voluntary Separation Incentive Payments to
employees.
(a) Agencies may make offers of Voluntary Separation Incentive
Payments to employees who agree to voluntarily separate by resignation,
early retirement, or optional retirement.
(b) Each time an agency with authority to offer Voluntary
Separation Incentive Payments establishes a window period for
acceptance of Voluntary Separation Incentive applications, it may limit
offers to its employees based on an established opening and closing
date or the acceptance of a specified number of applications. However,
at the time of the offer, the agency must notify its employees that it
retains the right to limit the number of Voluntary Separation Incentive
Payment offers by use of a specific closing date or by receipt of a
specified number of applications.
(c) An agency's downsizing and/or reshaping strategy may change,
necessitating a change in the offer notice to employees. If the amended
notice includes a revised closing date, or a revised number of
applications to be accepted, the new date or number of applications
must be announced to the same group of employees included in the
original announcement. If a new or separate notice includes a new
window period with a new closing date, or a new instance of a specific
number of applications to be accepted, the new window period or number
of applications to be accepted may be announced to a different group of
employees as long as the new group is covered by the approved Voluntary
Separation Incentive Payment authority.
(d) Section 4311 of title 38, United States Code, requires that,
for all practical purposes, agencies treat employees on military duty
as though they were still on the job. Further, employees are not to be
disadvantaged because of their military duty. In accordance with these
provisions, employees on military duty who would otherwise be eligible
for an offer of a Voluntary Separation Incentive Payment will have 30
days following their return to duty to either accept or reject an offer
of a Voluntary Separation Incentive Payment. This is true even if the
Voluntary Separation Incentive Payment authority provided by OPM has
expired.
(e) An employee may separate from the service voluntarily, with a
Voluntary Separation Incentive Payment, if, on the date of separation,
the employee:
(1) Is serving in a position covered by a Voluntary Separation
Incentive Payment offer; and
(2) Meets the definition of employee discussed in 5 U.S.C. 3521.
(f) Agencies are responsible for ensuring that employees are not
coerced into accepting a Voluntary Separation Incentive Payment. If an
agency finds any instances of coercion, it must take appropriate
corrective action.
(g) An agency may not offer Voluntary Separation Incentive Payments
beyond the stated expiration date of an authority or assign an
effective date for a Voluntary Separation Incentive Payment that is
beyond the time period for paying a Voluntary Separation Incentive
Payment that was stated in the agency's approved Voluntary Separation
Incentive Payment plan.
(h) An agency may not offer Voluntary Separation Incentive Payments
to employees who are outside the scope of the Voluntary Separation
Incentive Payment authority approved by OPM.
(i) OPM may amend, limit, or terminate Voluntary Separation
Incentive Payment authority if it determines that the agency is no
longer undergoing the condition(s) that formed the basis for its
approval or to ensure that the law and regulations governing Voluntary
Separation Incentive Payments, including the Voluntary Separation
Incentive Payment usage reporting requirements, are being properly
followed.
Sec. 576.104 Additional agency requirements
(a) After OPM approves an agency's plan for Voluntary Separation
Incentive Payments, the agency is required to immediately notify OPM of
any subsequent changes in the conditions that served as the basis for
the approval of the Voluntary Separation Incentive Payment authority.
(b) Agencies are required to provide OPM with interim and final
Voluntary Separation Incentive Payment reports, as covered in OPM's
approval letter to the agency. OPM may suspend or cancel a Voluntary
Separation Incentive Payment authority if the agency is not in
compliance with the reporting requirements or reporting schedule
specified in OPM's Voluntary Separation Incentive Payment authority
approval letter.
[[Page 3861]]
Sec. 576.105 Existing Voluntary Separation Incentive Payment
authorities.
As provided in section 1313(a)(3) of Public Law 107-296, any agency
exercising Voluntary Separation Incentive authority in effect on
January 24, 2003, may continue to offer Voluntary Separation Incentives
consistent with that authority until that authority expires. An agency
that is eligible to offer Voluntary Separation Incentive Payments under
this authority and under any other statutory authority may choose which
authority it wishes to use, or offer incentives under both.
Subpart B--Waiver of Repayment of Voluntary Separation Incentive
Payments
Sec. 576.201 Definitions.
`Employment' means employment with the Government of the United
States, including employment under a personal services contract (or
other direct contract) with the United States Government (other than an
entity in the legislative branch) unless employed pursuant to Sec.
576.203(a).
Sec. 576.202 Repayment requirement.
An executive branch employee who received a Voluntary Separation
Incentive Payment as described in subpart A of this part and accepts
any employment for compensation with the Government of the United
States within 5 years after the date of the separation on which the
payment is based must repay the entire amount of the Voluntary
Separation Incentive Payment to the agency that paid it before the
individual's first day of reemployment.
Sec. 576.203 Waivers of the Voluntary Separation Incentive Repayment
requirement.
(a)(1) If the proposed reemployment is with an agency other than
the General Accountability Office, the United States Postal Service, or
the Postal Rate Commission, the Director of the Office of Personnel
Management may, at the request of the head of the agency, waive the
repayment if--
(i) The individual involved possesses unique abilities and is the
only qualified applicant available for the position; or
(ii) In case of an emergency involving a direct threat to life or
property, the individual--
(A) Has skills directly related to resolving the emergency; and
(B) Will serve on a temporary basis only so long as that
individual's services are made necessary by the emergency.
(2) If the proposed reemployment is with an entity in the
legislative branch, the head of the entity or the appointing official
may waive the repayment if the individual involved possesses unique
abilities and is the only qualified applicant available for the
position.
(3) If the proposed reemployment is with the judicial branch, the
Director of the Administrative Office of the United States Courts may
waive the repayment if the individual involved possesses unique
abilities and is the only qualified applicant available for the
position.
(4) The repayment waiver provisions under this section do not
extend to a repayment obligation resulting from employment under a
personal services contract or other direct contract.
(b) For a Voluntary Separation Incentive Payment made under
statutory authority other than subpart A of this part, the agency
should review the authorizing statute and, if a waiver is permitted,
submit a request as specified by that statute.
[FR Doc. 05-1483 Filed 1-26-05; 8:45 am]
BILLING CODE 6325-39-M