Recruitment and Relocation Incentive Waivers

<RULE> OFFICE OF PERSONNEL MANAGEMENT <CFR>5 CFR Part 575</CFR> <DEPDOC>[Docket ID: OPM-2023-0027]</DEPDOC> <RIN>RIN 3206-AO36</RIN> <SUBJECT>Recruitment and Relocation Incentive Waivers</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Office of Personnel Management. <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> The Office of Personnel Management (OPM) is issuing a final rule to expand the authority to approve waivers of the normal payment limitations on recruitment and relocation incentives. An expansion of the waiver approval authority provides agencies with access to higher payment limitations for these flexibilities without requesting approval from OPM. In addition, this final rule gives agencies flexibility to set the length of the required service period for recruitment incentives to a period less than 6 months but not more than 4 years, which aligns the service requirements for recruitment incentives with those for relocation incentives. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> This final rule is effective February 13, 2026. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Gene Holson by telephone at (202) 606-2858 or by email at <E T="03">paypolicy@opm.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">Overview</HD> On November 15, 2023, OPM issued a proposed rule in the <E T="04">Federal Register</E> at 88 FR 78243  <SU>1</SU> <FTREF/> to expand the authority to approve waivers of the normal payment limitations on recruitment and relocation incentives. In addition, the rule proposed to give agencies flexibility to set the length of the required service period for recruitment incentives to a period less than 6 months but not more than 4 years, which would align the service requirements for recruitment incentives with those for relocation incentives and provide agencies with additional flexibility in taking advantage of this incentive as a recruitment tool. Finally, OPM proposed revising several sections to use gender neutral language. <FTNT> <SU>1</SU>  See 88 FR 78243 (November 15, 2023). </FTNT> The 60-day comment period on the proposed rule ended on January 16, 2024. After consideration of public comments, OPM is issuing a final rule that adopts the proposed changes to the recruitment and relocation incentive regulations except OPM is not revising any sections to use gender neutral language. This final rule is effective February 13, 2026. <HD SOURCE="HD1">Background</HD> Section 101 of the Federal Workforce Flexibility Act of 2004 (Act) (Pub. L. 108-411, October 30, 2004) amended 5 U.S.C. 5753 and 5754 by providing enhanced authorities to pay recruitment, relocation, and retention incentives. Congress originally provided the authority to pay such incentives under the Federal Employees Pay Comparability Act of 1990 (Pub. L. 101-509, November 5, 1990). In the 2004 Act, Congress expanded the circumstances under which these flexibilities may be paid and enabled agencies to make the payments in more ways to enhance their desired effect in assisting Federal agencies' efforts to recruit and retain the kind of workforce needed in the 21st century. OPM's regulations at 5 CFR part 575, subparts A, B, and C, implement these authorities. <HD SOURCE="HD2">Recruitment Incentives</HD> Under 5 U.S.C. 5753 and 5 CFR part 575, subpart A, an agency may pay a recruitment incentive to an employee newly appointed to a General Schedule or other covered position in the Federal service when the agency determines the position is likely to be difficult to fill in the absence of an incentive. (See 5 CFR 575.105(a).) The employee must sign an agreement to fulfill a period of service with the agency. A recruitment incentive may not exceed 25 percent of the employee's annual rate of basic pay in effect at the beginning of the service period, multiplied by the number of years (including fractions of a year) in the service period (not to exceed 4 years). A recruitment incentive may be paid as an initial lump-sum payment at the beginning of the service period, in installments throughout the service period, as a final lump-sum payment upon completion of the service period, or in a combination of these methods. (See 5 CFR 575.109.) OPM has provided a fact sheet with additional information on recruitment incentives. <SU>2</SU> <FTREF/> The fact sheet will be updated to reflect the changes made by this final rule before the effective date. <FTNT> <SU>2</SU>  Office of Personnel Management. “Fact Sheet: Recruitment Incentives.” <E T="03">https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/recruitment-incentives/.</E> </FTNT> <HD SOURCE="HD2">Relocation Incentives</HD> Under 5 U.S.C. 5753 and 5 CFR part 575, subpart B, an agency may pay a relocation incentive to a current employee who must relocate to accept a General Schedule or other covered position in a different geographic area (permanently or temporarily) if the agency determines that the position is likely be difficult to fill in the absence of an incentive. <SU>3</SU> <FTREF/> (See 5 CFR 575.205(a).) The employee must sign an agreement to fulfill a period of service with the agency. Like a recruitment incentive, a relocation incentive may not exceed 25 percent of the employee's annual rate of basic pay in effect at the beginning of the service period multiplied by the number of years (including fractions of a year) in the service period (not to exceed 4 years). The incentive may be paid as an initial lump-sum payment at the beginning of the service period, in installments throughout the service period, as a final lump-sum payment upon completion of the service period, or in a combination of these methods. (See 5 CFR 575.209.) OPM has provided a fact sheet with additional information on relocation incentives. <SU>4</SU> <FTREF/> The fact sheet will be updated to reflect the changes made by this final rule before the effective date. <FTNT> <SU>3</SU>  Relocation incentives under 5 U.S.C. 5753 and 5 CFR part 575, subpart B are distinct from relocation allowances under the General Services Administration's Federal Travel Regulation. (See 41 CFR part 302.) </FTNT> <FTNT> <SU>4</SU>  Office of Personnel Management. “Fact Sheet: Relocation Incentives.” <E T="03">https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/relocation-incentives/.</E> </FTNT> <HD SOURCE="HD1">Amendments to Recruitment and Relocation Incentive Regulations</HD> <HD SOURCE="HD2">Recruitment and Relocation Incentive Waivers</HD> As described the “Background” section above, agencies have the authority to approve a recruitment or relocation incentive for payments of up to 25 percent of an employee's annual rate of basic pay times the number of years in a service agreement (not to exceed 4 years or 100 percent of annual basic pay). However, a waiver is required when an agency would like to exceed this payment limit to make larger payments over shorter service agreement lengths. Previously, agencies were required to submit a waiver request to OPM if they wanted to offer a recruitment or relocation incentive in excess of the normal payment limitations. For example, a waiver has not been required for an agency to pay a recruitment or relocation incentive of up to 25 percent of annual basic pay for a 1-year service agreement, 50 percent of basic pay for a 2-year service agreement, or 100 percent of basic pay for a 4-year service agreement. However, an agency has had to seek a waiver from OPM to pay a recruitment or relocation incentive of 50 percent of annual basic pay for a 1-year service agreement or 100 percent of annual basic pay for a 2-year service agreement. OPM has provided a fact sheet on calculating maximum recruitment and relocation incentives for service periods of various lengths. <SU>5</SU> <FTREF/> The fact sheet will be updated to reflect the changes made by this final rule before the effective date. <FTNT> <SU>5</SU>  Office of Personnel Management. “Fact Sheet: Calculating Maximum Recruitment and Relocation Incentives for Service Periods of Various Lengths.” <E T="03">https://www.opm.gov/policy-data-oversight/pay-leave/recruitment-relocation-retention-incentives/fact-sheets/calculating-maximum-recruitment-and-relocation-incentives-for-service-periods-of-various-lengths/.</E> </FTNT> Upon the effective date of this final rule, agencies will have the authority to waive the normal limits and approve a recruitment or relocation incentive of up to 50 percent of an employee's annual rate of basic pay times the number of years in a service agreement (not to exceed 100 percent of annual basic pay), based on a critical agency need. Specifically, revised sections 5 CFR 575.109(c) and 575.209(c) allow an agency to waive the limits for a recruitment or relocation incentive, respectively, under specified conditions. Under this final rule, a waiver determination must include a description of the critical agency need the proposed recruitment or relocation incentive would address. The authorized agency official 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 T="03">e.g.,</E> programs or projects related to a national emergency or implementing a new law or critical management initiative). To assist agencies in using the waiver authority, OPM has provided waiver request templates for recruitment incentives  <SU>6</SU> <FTREF/> and relocation incentives. <SU>7</SU> <FTREF/> These templates will be updated to reflect the changes made by this final rule. <FTNT> <SU>6</SU>  Office of Personnel Management. “Recruitment Incentive Waiver Templa ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 88k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━