Reduction in Force Service Credit; Retention Records

OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 351

RIN 3206-AI09

Reduction in Force Service Credit; Retention Records

AGENCY: Office of Personnel Management.

ACTION: Final rulemaking.

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SUMMARY: The Office of Personnel Management (OPM) is issuing final

regulations that cover service credit for reduction in force purposes.

These final regulations also cover access to reduction in force records

by employees and their representatives.

DATES: These regulations are effective May 7, 1999.

FOR FURTHER INFORMATION CONTACT: Thomas A. Glennon or Jacqui R. Yeatman

at (202) 606-0960, FAX (202) 606-2329.

SUPPLEMENTARY INFORMATION:

Background

On August 14, 1998, OPM published proposed regulations (63 FR

43640) that covered the crediting of civilian and uniformed service for

purposes of reduction in force competition under part 351 of this

title. These proposed regulations also covered who has access to

reduction in force retention records, when that access is available,

and what records are available for review.

Comments (Overview)

OPM received six comments on the proposed regulations: one from a

Federal agency, two from veterans' organizations, one from an employee

association, one from an employees' union, and one from an individual

employee.

Comments on Reduction in Force Service Credit Regulations

OPM's reduction in force regulations found in part 351 are

published under authority of 5 U.S.C. 3502(a), which originated in

Public Law 78-359 (the Veterans' Preference Act of 1944). The statute

provides that OPM's reduction in force regulations must give effect to

four factors in releasing employees: (1) Tenure of employment (i.e.,

type of appointment) (5 U.S.C. 3502(a)(1)); (2) veterans' preference (5

U.S.C. 3502(a)(2)); (3) length of service (5 U.S.C. 3502(a)(3)); and

(4) performance ratings (5 U.S.C. 3502(a)(4)).

The proposed regulations clarify longstanding OPM policy on the

crediting of civilian and uniformed service for purposes of reduction

in force competition under part 351 of this title.

These final regulations cover what types of service are creditable

when an agency establishes the order of retention for competing

employees in a reduction in force.

The agency concurred with the proposed regulations as written,

including the provisions covering both reduction in force service

credit and access to retention records by employees and their

representatives.

The employee association objected to proposed Sec. 351.503(b)(3),

which provides that an employee may not receive dual reduction in force

service credit for service performed on active duty in the Armed Forces

that is concurrent with civilian employment as a Federal employee.

Proposed Sec. 351.503(b)(3) is adopted without revision. This

prohibition against double reduction in force service credit is

consistent with the provisions of the statute (i.e., 5 U.S.C.

3502(a)(3)), and longstanding appellate interpretation applicable to

OPM's governmentwide programs authorized by 5 U.S.C. (see Seltzer v.

Office of Personnel Management, 833 F.2d 975 (Fed. Cir., 1987)).

The two veterans' organizations objected to proposed

Sec. 351.503(b)(2)(i), which provides that a retired member of a

uniformed service who is receiving retired pay based upon 20 or more

years of active service in the Armed Forces is generally entitled to

credit under this part only for the length of time in active service in

the Armed Forces during a war, or active duty served in a campaign or

expedition for which a campaign badge or expeditionary medal has been

authorized.

Proposed Sec. 351.503(b)(2)(ii) provides that a retired member of a

uniformed service with 20 or more years of creditable active service in

the Armed Forces is entitled to reduction in force service credit for

all of that time only if the employee is considered a preference

eligible under 5 U.S.C. 3501(a)(3), as implemented in

Sec. 351.501(d)(1).

As covered in the summary below of the final reduction in force

service credit regulations, proposed Sec. 351.503(b)(2)(i) is adopted

without revision. The final regulation incorporates the statutory

requirements of 5 U.S.C. 3502(a)(A) and (B), which originated in Public

Law 88-448 (the Dual Compensation Act of 1964).

Referencing 5 U.S.C. 3501(a)(3)(A), 5 U.S.C. 3502(a)(B)(ii) (from

Pub. L. 88-448) provides that a retired member of a uniformed service

with 20 or more years of creditable Armed Forces service is entitled to

reduction in force retention service credit only if the individual is

receiving a disability retirement from the Armed Forces resulting from

injury or disease received in the line of duty as a direct result of

armed conflict, or caused by an instrumentality of war that incurred in

the line of duty during a period of war as defined by 38 U.S.C. 101 and

301. (OPM implements 5 U.S.C. 3501(a)(3)(A) in Sec. 351.501(d)(1) of

the reduction in force regulations.)

Summary of Final Reduction in Force Service Credit Regulations

Final Sec. 351.503(a) provides that all civilian service as a

Federal employee, as defined in 5 U.S.C. 2105(a), is creditable for

purposes of determining the reduction in force rights of a competing

employee. Civilian service that does not meet the definition set forth

in 5 U.S.C. 2105(a) is creditable for retention purposes only if

specifically authorized by statute.

Final Sec. 351.503(b)(2)(i) provides that, except as provided in

Sec. 351.503(b)(2)(ii), a retired member of a uniformed service who is

receiving retired pay based upon 20 or more years of active service in

the Armed Forces is entitled to credit under this part only for the

length of time in active service in the Armed Forces during a war, or

active duty served in a campaign or expedition for which a campaign

badge or expeditionary medal

[[Page 16798]]

has been authorized. (For additional information on

Sec. 351.503(b)(2)(i), refer to the Supplementary Information section

above with ``Comments on the Reduction in Force Service Credit

Regulations.'')

Final Sec. 351.503(b)(2)(ii) provides that a retired member of a

uniformed service with 20 or more years of creditable active service in

the Armed Forces is entitled to reduction in force service credit for

all of the individual's active service in the Armed Forces only if the

employee is considered a preference eligible under 5 U.S.C. 3501(a)(3),

as implemented in Sec. 351.501(d)(1).

Final Sec. 351.503(b)(3) provides that an employee may not receive

dual retention service credit for service performed on active duty in

the Armed Forces that was performed during concurrent civilian

employment as a Federal employee.

Final Sec. 351.503(c)(1) provides that the agency is responsible

for establishing both the service computation date, and the adjusted

service computation date, applicable to each employee competing for

retention. Also, the agency is responsible for adjusting the service

computation dates to withhold retention service credit for

noncreditable service.

Final Sec. 351.503(c)(2) provides that the service computation date

includes all actual creditable service under Secs. 351.503(a) and (b).

Final Sec. 351.503(c)(3) provides that the adjusted service

computation date includes all actual creditable service under

Secs. 351.503(a) and (b), and additional retention service credit for

performance authorized by Sec. 351.504(d).

Final Sec. 351.503(d) covers the calculation of the service

computation date for retention purposes.

Final Sec. 351.503(e) covers the calculation of the adjusted

service computation date that includes additional service credit for

retention purposes that is authorized by Sec. 351.504(d).

OPM further implements Sec. 351.503 through instructions found in

the OPM Operating Manual, ``The Guide to Processing Personnel

Actions,'' Chapter 6, ``Determining Creditable Service and Determining

Service Computation Dates (SCD's).''

Comments on the Reduction in Force Regulations Covering Retention

Records

As previously noted in the ``Comments (Overview)'' section of

Supplementary Information, the agency that commented on the proposals

concurred with the regulations as written, including the provisions on

both reduction in force service credit and access to retention records

by employees and their representatives.

The employee who commented on the proposed regulations only

addressed the provisions covering access to reduction in force records.

The employee supported the proposed regulations as written. The

employee added that, under the Privacy Act (see the following

paragraphs below for additional information on application of the

Privacy Act), her former agency denied her access to retention records

even after she received a specific notice of separation by reduction in

force. The employee concluded that proposed Sec. 351.505 would prevent

the recurrence of a similar situation for other employees reached for

reduction in force actions.

The employees' union objected to proposed Sec. 351.505(b)(1) on the

basis that the regulation violates 5 U.S.C. 552a(d)(1), which is part

of the Privacy Act. Specifically, the union argues that proposed

Sec. 351.505(b)(1) improperly limited employees' access to retention

records and related records only to an employee (including an

employee's representative) who actually receives a specific notice of

reduction in force. The employees' union also objected to proposed

Sec. 351.505(b)(1) on the basis that it violates Sec. 351.201(c), which

provides that each agency is responsible for applying OPM's reduction

in force regulations uniformly and consistently.

As covered in the summary below of the final reduction in force

service credit regulations, proposed Sec. 351.505(b)(1) is adopted

without revision.

The union is incorrect in its assertion that 5 U.S.C. 552a(d)(1) of

the Privacy Act is applicable to Sec. 351.505 and the retention records

that an agency develops under authority of part 351 of this chapter.

As noted by the union, 5 U.S.C. 552a(a)(5) states that ``the term

'system of records'' means a group of any records under the control of

any agency from which information is retrieved by the name of the

individual or by some identifying number, symbol, or other identifying

particular assigned to the individual.'' However, the retention records

covered by Sec. 351.505 are in fact ``retention register(s)'' developed

and maintained under authority of Sec. 351.404 rather than a system of

records covered by 5 U.S.C. 552a(d)(1) of the Privacy Act.

Information from retention registers is not first retrieved on the

basis of an employee's name or other personal identifying information,

but instead on the basis of groups of interchangeable positions, and

next on the basis of the four retention factors that define reduction

in force competition under part 351 of this chapter. Sec. 351.404(a)

provides in pertinent part that ``When a competing employee is to be

released from a competitive level under this part (i.e., part 351 of

this chapter), the agency shall establish a separate retention register

for that ``competitive level. The retention register is prepared from

the current retention records of employees.'' (Emphasis added for

reference.)

Section 351.403 similarly provides that each competitive level

(which serves as the basis for a retention register) is developed first

from the agency's identification and retrieval of groups of positions

rather than the names or other identifying information of individual

employees. Specifically, Sec. 351.403(a)(1) and (2) provide that ``(1)

Each agency shall establish competitive levels consisting of all

positions in a competitive area which are in the same grade (or

occupational level) and classification series, and which are similar

enough in duties, qualification requirements, pay schedules, and

working conditions so that the agency may reassign the incumbent of one

position to any of the other positions in the level without undue

interruption.

``(2) Competititive level determinations are based on each

employee's official position, not the employee's personal

qualifications.''

Accepting the union's argument that 5 U.S.C. 552a(d)(1) of the

Privacy Act is applicable to Sec. 351.505, and a retention register

developed and maintained under authority of Sec. 351.404, would mean

that a released employee (and the employee's representative) does not

have access to any retention records that contained the name, or other

identifying retention (such as service dates), of employees competing

for positions in the reduction in force. This would result in the same

situation described by the employee who commented above on the proposed

regulations that, because of its interpretation of the Privacy Act, her

agency denied her access to any retention records containing specific

information relating to other employees in her competitive area.

The union is also incorrect in its conclusion that proposed

Sec. 351.505(b) violates Sec. 351.201(c), which provides that ``Each

agency is responsible for assuring that the provisions in this part

(i.e., part 351 of this chapter) are uniformly and consistently applied

in any one reduction in force.''

Proposed Sec. 351.505(b) for the first time requires agencies to

provide retention records to the representative of an employee who has

received a

[[Page 16799]]

specific notice of reduction in force. Previously, there was no

authority in OPM's regulations for agencies to provide union

representatives (or any individual other than the employee) with this

essential information unless the employee subsequently filed a

reduction in force appeal or grievance.

Similarly, proposed Sec. 351.505(c) for the first time specifies

the type of retention-related information that an agency would be

required to make available to an employee (and/or the employee's

representative) who is reached for a reduction in force action. For

example, the agency would now be required to provide employees (and

their representatives) with access to retention records evidencing how

the employee was reached for release from the competitive level, as

well as any records related to an employee's potential bump and retreat

rights. No longer could an agency claim that it met its obligation to

provide retention information to a released employee by simply giving

the employee a ``sanitized'' retention register with all of the

pertinent information blocked out.

The union is correct in stating that proposed Sec. 351.505(b) would

not extend access to agencies' retention records to the public realm.

However, the union is incorrect in its argument that proposed

Sec. 351.505(b)(1) violates present Sec. 351.201(c), which provides

that an agency must apply OPM's reduction in force regulations

uniformly and consistently.

OPM clearly recognizes that reduction in force actions impact upon

people, sometimes even resulting in actions such as involuntary

separations and downgradings. Proposed Sec. 351.505(b) respects the

privacy of all individual employees who have received notices of

reduction in force actions while still providing them (and their

representatives) with a right to relevant information concerning their

agency's application of reduction in force procedures to them.

Similarly, Sec. 351.201(c) requires that the agency must apply the

same retention procedures to all employees who received specific

reduction in force notices (e.g., the agency may not establish

different competitive areas based upon grades or classification

series). There is no basis for the union to expand the scope of

Sec. 351.201(c) and conclude that any employee (or the employee's

representative) has the right to view all retention registers. Again,

we believe that the policy in proposed Sec. 351.505(b) provides each

employee who is reached for a reduction in force action with full

information concerning how the agency determined the employee's

retention rights, while still recognizing the personal sensitivity of

the situation.

Also, the union is incorrect in stating that proposed

Sec. 351.505(b) violates 5 U.S.C. 7114(b)(4), which requires an agency

to furnish information to a union that is acting as a collective

bargaining agent. The union argues that because proposed

Sec. 351.505(b) would limit unions' access to employees' retention

records, the regulation would constitute an unfair labor practice under

5 U.S.C. 7114(b)(4).

In fact, 5 U.S.C. 7114(b)(4) specifically states that an agency

must furnish a union certain information ``to the extent not prohibited

by law.'' To the extent that proposed Sec. 351.505(b) prohibits release

of information to unions concerning reduction in force retention

records, the release of that information is ``prohibited by law'' for

purposes of 5 U.S.C. 7114(b)(4). OPM's interpretation is that proposed

Sec. 351.505(b) is a regulation that has the force and effect of law.

Therefore, proposed Sec. 351.505(b) could not, and does not, violate 5

U.S.C. 7114(b)(4), which is the applicable controlling statute.

Finally, the union objected to proposed Sec. 351.505(f), which

provides that an agency must preserve all registers and records

relating to a reduction in force for at least 1 year after the date the

agency issues specific notices of reduction in force. As an

alternative, the union asked that OPM require agencies to retain all

records related to a reduction in force for at least 5 years.

As covered in the summary below of the final reduction in force

service credit regulations, proposed Sec. 351.505(f) is adopted without

revision.

The union maintained that proposed Sec. 351.505(f) would limit the

ability of employees to file appeals or grievances that would

potentially establish a link between agency actions in a current

reduction in force with one or more previous reduction in force actions

conducted by the agency more than 1 year ago. The union used examples

such as an employee competing in successive reduction in force actions

on a one person competitive level.

The union is incorrect in its assumptions.

Reduction in force actions under authority of part 351 of this

chapter are based upon organizational changes, as defined in

Sec. 351.201(a)(2), in which employees compete for retention based upon

the four factors set forth in 5 U.S.C. 3502(a) (1)-(4).

Section 351.506(a) provides that an employee's rights and benefits

in a single reduction in force are based upon the effective date of

that reduction in force action. An employee who is separated or

downgraded by reduction in force under authority of part 351 and

believes that the agency improperly applied OPM's reduction in force

regulations in determining the employee's retention rights in that

reduction in force has a basic right, as applicable, to file a timely

appeal to the Merit Systems Protection Board, or to file a grievance

under the provisions of a controlling collective bargaining agreement.

(For reference, Sec. 351.901 provides that a separated or

downgraded employee has a basic right to file an appeal to the Merit

Systems Protection Board; Sec. 1201.22(b) of the Board's regulations

provides that the employee must file the appeal within 30 days of the

effective date of the reduction in force action. Section 1201.3(c)(1)

of the Board's regulations provides that an employee who is covered by

a collective bargaining agreement under 5 U.S.C. 7121 has a basic right

to follow the negotiated grievance procedures contained in the

agreement for resolving any action that could otherwise be appealed to

the Board, except as otherwise provided in Sec. 1201.3(c).)

Turning to the union's example, the fact that an employee was

placed in a one person competitive level for two reduction in force

actions likely means that the employee simply continues to hold the

same unique position. As previously noted, Sec. 351.201(c) provides

that the agency is responsible ``* * * for assuring that the provisions

in this part are uniformly and consistently applied in any one

reduction in force.'' (Emphasis added for reference.) Similarly, since

Sec. 351.506(a) provides that an employee's retention rights and

benefits in a single reduction in force are based upon the effective

date of that reduction in force action, each reduction in force is a

distinct event for which the agency is responsible under authority of

Sec. 351.204. There is no relation between retention records used in a

prior reduction in force and records in a later reduction in force.

OPM believes that, again consistent with agency responsibility

under authority of Sec. 351.204, the agency may determine whether or

not to retain retention records for more than 1 year, as well as the

length of the extended retention. For example, an agency may decide to

retain the retention records resulting from actions affecting 100

employees longer than retention records resulting from the closure of a

duty station staffed with three employees.

[[Page 16800]]

Summary of Final Reduction in Force Regulations on Retention

Records

Final Sec. 351.505(a) provides that the agency is responsible for

maintaining the correct personnel records that are used to determine

employees' retention standing.

Final Sec. 351.505(b) provides that the agency must allow its

retention registers and related records to be inspected by an employee

of the agency who has received a specific reduction in force notice,

and/or the employee's representative if the representative is acting on

behalf of that individual employee. Previously, there was no authority

permitting an employee's representative to have access to pertinent

retention records. The representative now has access to pertinent

retention records when acting on behalf of an individual employee who

has received a specific notice of reduction in force under part 351 of

this chapter.

Final Sec. 351.505(b) also provides that an authorized

representative of OPM has the right to review an agency's retention

records.

Final Sec. 351.505(c) provides that an employee who has received a

specific notice of reduction in force has the right to review any

completed records used by the agency in a reduction in force action

that was taken, or will be taken, against the employee.

Final Sec. 351.505(d) provides that an employee who has not

received a specific reduction in force notice has no right to review

the agency's retention registers and related records.

Final Sec. 351.505(e) provides that the agency is responsible for

ensuring that each employee's access to retention records is consistent

with both the Freedom of Information Act and the Privacy Act.

Final Sec. 351.505(f) provides that the agency must preserve all

registers and records relating to a reduction in force for at least 1

year after the date the agency issues specific reduction in force

notices.

Regulatory Flexibility Act

I certify that this regulation will not have a significant economic

impact on a substantial number of small entities because it only

affects Federal employees.

List of Subjects in Part 351

Administrative practice and procedure, Government employees, U.S.

Office of Personnel Management.

Janice R. Lachance,

Director.

Accordingly, OPM is amending part 351 of title 5, Code of Federal

Regulations, as follows:

PART 351--REDUCTION IN FORCE

1. The authority citation for part 351 continues to read as

follows:

Authority: 5 U.S.C. 1302, 3502, 3503; sec. 351.801 also issued

under E.O. 12828, 58 FR 2965.

2. Section 351.503 is revised to read as follows:

Sec. 351.503 Length of service.

(a) All civilian service as a Federal employee, as defined in 5

U.S.C. 2105(a), is creditable for purposes of this part. Civilian

service performed in employment that does not meet the definition of

Federal employee set forth in 5 U.S.C. 2105(a) is creditable for

purposes of this part only if specifically authorized by statute as

creditable for retention purposes.

(b)(1) As authorized by 5 U.S.C. 3502(a)(A), all active duty in a

uniformed service, as defined in 5 U.S.C. 2101(3), is creditable for

purposes of this part, except as provided in paragraphs (b)(2) and

(b)(3) of this section.

(2) As authorized by 5 U.S.C. 3502(a)(B), a retired member of a

uniformed service who is covered by Sec. 351.501(d) is entitled to

credit under this part only for:

(i) The length of time in active service in the Armed Forces during

a war, or in a campaign or expedition for which a campaign or

expedition badge has been authorized; or

(ii) The total length of time in active service in the Armed Forces

if the employee is considered a preference eligible under 5 U.S.C. 2108

and 5 U.S.C. 3501(a), as implemented in Sec. 351.501(d).

(3) An employee may not receive dual service credit for purposes of

this part for service performed on active duty in the Armed Forces that

was performed during concurrent civilian employment as a Federal

employee, as defined in 5 U.S.C. 2105(a).

(c)(1) The agency is responsible for establishing both the service

computation date, and the adjusted service computation date, applicable

to each employee competing for retention under this part. If

applicable, the agency is also responsible for adjusting the service

computation date and the adjusted service computation date to withhold

retention service credit for noncreditable service.

(2) The service computation date includes all actual creditable

service under paragraph (a) and paragraph (b) of this section.

(3) The adjusted service computation date includes all actual

creditable service under paragraph (a) and paragraph (b) of this

section, and additional retention service credit for performance

authorized by Sec. 351.504(d).

(d) The service computation date is computed on the following

basis:

(1) The effective date of appointment as a Federal employee under 5

U.S.C. 2105(a) when the employee has no previous creditable service

under paragraph (a) or (b) of this section; or if applicable,

(2) The date calculated by subtracting the employee's total

previous creditable service under paragraph (a) or (b) of this section

from the most recent effective date of appointment as a Federal

employee under 5 U.S.C. 2105(a).

(e) The adjusted service computation date is calculated by

subtracting from the date in paragraph (d)(1) or (d)(2) of this section

the additional service credit for retention authorized by

Sec. 351.504(d).

3. Section 351.505 is revised to read as follows:

Sec. 351.505 Records.

(a) The agency is responsible for maintaining correct personnel

records that are used to determine the retention standing of its

employees competing for retention under this part.

(b) The agency must allow its retention registers and related

records to be inspected by:

(1) An employee of the agency who has received a specific reduction

in force notice, and/or the employee's representative if the

representative is acting on behalf of the individual employee; and

(2) An authorized representative of OPM.

(c) An employee who has received a specific notice of reduction in

force under authority of subpart H of this part has the right to review

any completed records used by the agency in a reduction in force action

that was taken, or will be taken, against the employee, including:

(1) The complete retention register with the released employee's

name and other relevant retention information (including the names of

all other employees listed on that register, their individual service

computation dates calculated under Sec. 351.503(d), and their adjusted

service computation dates

[[Page 16801]]

calculated under Sec. 351.503(e)) so that the employee may consider how

the agency constructed the competitive level, and how the agency

determined the relative retention standing of the competing employees;

and

(2) The complete retention registers for other positions that could

affect the composition of the employee's competitive level, and/or the

determination of the employee's assignment rights (e.g., registers to

which the released employee may have potential assignment rights under

Sec. 351.701(b) and (c)).

(d) An employee who has not received a specific reduction in force

notice has no right to review the agency's retention registers and

related records.

(e) The agency is responsible for ensuring that each employee's

access to retention records is consistent with both the Freedom of

Information Act (5 U.S.C. 552), and the Privacy Act (5 U.S.C. 552a).

(f) The agency must preserve all registers and records relating to

a reduction in force for at least 1 year after the date it issues a

specific reduction in force notice.

[FR Doc. 99-8587 Filed 4-6-99; 8:45 am]

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