Waiver of Repayment of Voluntary Separation Incentive Payments

summary: The Federal Workforce Restructuring Act of 1994, Public Law

103-226, enacted March 30, 1994, generally requires that an employee

who accepts a voluntary separation incentive payment must repay the

entire amount of the payment to the agency that paid the payment if the

employee is reemployed by the Federal Government, in either a temporary

or permanent status, within 5 years following the effective date of

separation on which the payment was based. The payment must also be

repaid if the employee accepts a personal services contract with the

Federal Government within the 5-year period. The Act allows Executive

agencies to request waivers of repayment from the Office of Personnel

Management if the individual the agency wants to reemploy possesses

unique abilities and is the only qualified applicant available for the

position. These regulations implement this waiver authority.

dates: Interim rules effective on November 9, 1994. Written comments

will be considered if received no later than January 9, 1995.

addresses: Send or deliver written comments to Leonard R. Klein,

Associate Director, Career Entry Group, Room 6F08, 1900 E Street, NW,

Washington, DC 20415.

for further information contact: Betty Pickering of the Workforce

Restructuring Office, Career Entry Group, on 202-606-0960 or fax 202-

606-2329.

supplementary information: The Federal Workforce Restructuring Act of

1994, Public Law 103-226, enacted March 30, 1994, authorizes the

payment of voluntary separation incentive payments to employees of

executive branch agencies.

Public Law 103-226 does not authorize the Department of Defense,

the Central Intelligence Agency, or the General Accounting Office to

pay voluntary separation incentive payments to their employees since

they have separate voluntary separation incentive program authorities.

However, Public Law 103-226 covers the Department of Defense and the

Central Intelligence Agency under the provisions dealing with employee

repayment of voluntary separation incentive payments on reemployment

with the Federal Government. The provisions dealing with employee

repayment of voluntary separation incentive payments on reemployment do

not apply to the General Accounting Office.

Public Law 103-226 requires an employee who receives a separation

incentive payment on or after March 30, 1994, from any executive branch

agency, including the Department of Defense and the Central

Intelligence Agency, to repay the entire amount, including all

deductions for taxes, etc., if reemployed in the Federal Government of

the United States within 5 years of the separation date. This

requirement applies to any employment, of any length, in any entity of

the Federal Government of the United States, including the United

States Postal Service, the White House, and non-appropriated fund

activities. Employees, except employees of the Department of Defense,

who receive a voluntary separation incentive payment and accept

employment with the Federal Government under a personal services

contract within 5 years of the date of separation must also repay the

entire amount of the incentive payment.

The statute establishes specific limited conditions under which

repayment of the voluntary separation incentive payment may be waived.

If the individual is to be reemployed by an Executive agency, the

Director of the Office of Personnel Management may waive repayment. For

reemployment in the Legislative branch, the head of the organization or

the appointing official may waive the repayment. For reemployment in

the Judicial branch, the Director of the Administrative Office of the

United States Courts has waiver authority. In all cases, a waiver is

permitted if the individual possesses unique abilities and is the only

qualified applicant available for the position. The Office of Personnel

Management does not have authority to approve waivers of repayment for

individuals who accept personal service contracts, or for individuals

reemployed in the Legislative or Judicial branches of the Federal

Government. These regulations, therefore, apply only to individuals who

are otherwise subject to the reemployment provision of the Federal

Workforce Restructuring Act and have accepted reemployment with the

executive branch agencies.

Reemployment and Waivers of Repayment

The Office of Personnel Management's specific criteria for waiving

repayment of a separation incentive payment are similar to criteria

used for waiving reduction in salary or retirement pay for reemployed

annuitants in that waivers will be approved in response to exceptional

recruiting difficulty. Requests for waivers must be submitted to the

Office of Personnel Management by the agency head or a designee at the

agency or departmental headquarters level. Two special provisions

reflect the intent of Public Law 103-226.

If the employee will be reemployed in the same agency, the request

for a waiver must show that the recruiting need could not have been

forseen before the employee's separation. An agency should not need to

rehire employees to whom it pays separation incentives since Public Law

103-226 gives agencies authority to control separations from critical

or hard-to-fill positions. The Office of Personnel Management will

approve waivers of repayment for reemployment in the same agency only

in rare and unusual circumstances.

The law authorizes waivers of repayment only for reemployment in

exceptionally hard-to-fill positions. Therefore, any waiver approved by

the Office of Personnel Management will apply to a specific position

and the employee appointed to it may not be reassigned during the 5-

year period following separation unless the employee repays the

separation incentive or the Office of Personnel Management approves a

new waiver.

Waiver of Notice of Proposed Rulemaking and Delay in Effective Date

Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists

for waiving the general notice of proposed rulemaking because the

statutory basis for these regulations (Pub. L. 103-226) was effective

March 30, 1994, and it would be contrary to the public interest to

delay implementation of rules covering reemployment and waivers of

repayment. For the same reasons, and pursuant to 5 U.S.C. 553(d)(3), I

find that good cause exists to waive the delay in effective date and

make these regulations effective in less than 30 days.

E.O. 12866, Regulatory Review

This rule has been reviewed by the Office of Management and Budget

in accordance with E.O. 12866.

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.

List of Subjects in 5 CFR Part 576

Government employees, wages.

U.S. Office of Personnel Management.

James B. King,

Director.

Accordingly, the Office of Personnel Management is adding a new

Part 576 to title 5, Code of Federal Regulations, as follows:

PART 576--WAIVER OF REPAYMENT OF VOLUNTARY SEPARATION INCENTIVE

PAYMENTS

Subpart A--Reemployment and Waiver of Repayment

Sec.

576.101 Repayment requirement.

576.102 Requesting Office of Personnel Management approval for

waiver of repayment.

Authority: 5 U.S.C. 2101 note.

Subpart A--Reemployment and Waiver of Repayment

Sec. 576.101 Repayment requirement.

(a) Who is covered. This subpart covers any executive agency

employee who received a voluntary separation incentive payment on or

after March 30, 1994, including employees of the Department of Defense

and Central Intelligence Agency.

(b) What is covered. This subpart covers reemployment of any

duration, under any authority, in the Federal Government of the United

States, within 5 years of the date of the separation on which payment

of an incentive is based.

(c) What is required. The employee must repay the entire amount of

the voluntary separation incentive payment, including all deductions

for taxes, etc., to the agency that made the payment. Repayment will be

made as provided in 5 U.S.C. 5514, as implemented in part 550, subpart

K, of this chapter, or other appropriate authority.

(d) Exception to the repayment requirement. If the individual

accepts reemployment with an Executive agency, the Office of Personnel

Management may waive repayment if the individual involved possesses

unique abilities and is the only qualified applicant available for the

position. Each waiver must be approved individually, as provided in

Sec. 576.102 of this part. Waivers of repayment are not required for

individuals who work as unpaid volunteers for the Federal Government.

Sec. 576.102 Requesting Office of Personnel Management approval for

waiver of repayment.

(a) Request by agency head. The head of an Executive agency may

request the Office of Personnel Management to approve a waiver of

repayment for an individual when the agency has determined that the

individual involved possesses unique abilities and is the only

qualified applicant available for the position. Authority to submit

such a request may not be redelegated to an official below the agency's

headquarters level (or, in the case of the Department of Defense, to an

official below the headquarters level of the military department or

Defense agency).

(b) Content of requests. Each request must:

(1) Identify the individual for whom the exception is requested,

the appointing authority to be used, and the position to which he or

she will be appointed.

(2) Describe how the position is essential to accomplishing the

agency's mission and how the individual is uniquely qualified for the

position.

(3) Describe the length, breadth, and results of the agency's

recruiting efforts for the position and any other factors demonstrating

that the individual is the only qualified applicant available for the

position.

(4) If the individual is being reemployed in the agency that paid

the separation incentive, demonstrate why the recruiting need could not

be foreseen at the time of separation.

(c) Application of exceptions. A waiver of repayment of a

separation incentive approved by the Office of Personnel Management

under this part applies only while the individual for whom it was

approved continues to serve in the same or a successor position. The

waiver terminates if the individual is assigned to a different position

during the 5-year period in which repayment is required, unless OPM

approves a new waiver.

[FR Doc. 94-27743 Filed 11-8-94; 8:45 am]

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