[Federal Register Volume 62, Number 46 (Monday, March 10, 1997)]
[Rules and Regulations]
[Pages 10681-10683]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 97-5835]



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 Rules and Regulations
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  Federal Register / Vol. 62, No. 46 / Monday, March 10, 1997 / Rules 
and Regulations  

[[Page 10681]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Parts 351 and 630

RIN 3206-AH64


Reduction in Force and Mandatory Exceptions

AGENCY: Office of Personnel Management.

ACTION: Interim rulemaking.

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SUMMARY: The Office of Personnel Management (OPM) is issuing interim 
regulations that implement recent legislation giving employees the 
right to use annual leave to establish initial retirement eligibility 
for employees in reduction in force and other restructuring situations. 
These regulations also implement related provisions concerning the 
availability of annual leave to qualify for continuance of health 
benefits in the same situation.

DATES: These regulations are effective March 10, 1997. Comments must be 
received on or before May 9, 1997.

ADDRESSES: Send or deliver written comments to: Mary Lou Lindholm, 
Associate Director for Employment Service, Room 6F08, Officer of 
Personnel Management, Washington, DC 20415.

FOR FURTHER INFORMATION CONTACT:
(part 351) Thomas A. Glennon or Edward P. McHugh, (202) 606-0960, FAX 
(202) 606-2329; (part 630) Jo Ann Perrini, (202) 606-2858, FAX (202) 
606-0824.

SUPPLEMENTARY INFORMATION: Section 634 of the Treasury, Postal Service, 
and General Government Appropriations Act, 1997, as contained in 
section 101(f) of the Omnibus Consolidated Appropriations Act, 1997 
(P.L. 104-208, approved September 30, 1996), provides that an employee 
who is being involuntarily separated from an agency due to reduction in 
force or transfer of function may elect to use annual leave and remain 
on the agency's rolls after the effective date the employee would 
otherwise have been separated in order to establish initial eligibility 
for immediate retirement, including discontinued service or voluntary 
early retirement. The same option is also available to acquire 
eligibility to continue health benefits into retirement. These 
provisions are codified in new 5 U.S.C. 6302(g).

    Since January 1993, OPM has provided similar benefits by 
regulation. Presently, an agency may elect to retain on annual leave an 
employee who has received a specific reduction in force notice so that 
the employee may establish initial eligibility for retirement, and/or 
for continuance of health benefits into retirement (58 FR 5563, January 
22, 1993, as amended at 60 FR 2678, January 11, 1995). For an employee 
to achieve initial eligibility in a reduction in force situation, 
agencies use a ``Permissive Temporary Exception'' under authority of 
section 5 CFR 351.608(d) to retain an employee past the effective date 
that the employee would have been separated.
    The new 5 U.S.C. 6302(g) required two major changes to OPM's 
regulatory provisions: (1) an employee who is being involuntarily 
separated now has a right to use his or her annual leave to achieve 
initial eligibility for retirement and/or continued health benefits 
coverage; and (2) this right extends to transfer of function relocation 
situations.
    To implement 5 U.S.C. 6302(g), section 5 CFR 351.606, Mandatory 
exceptions, is revised by adding a new paragraph (b).
    Section 5 CFR 351.606(b)(1) provides that an employee who is being 
involuntarily separated from an agency because of reduction in force 
under authority of 5 CFR part 351 may elect to use annual leave past 
the date that the employee would otherwise have been separated for the 
purpose of establishing initial eligibility under sections 5 U.S.C. 
8336, 8412, or 8414 for immediate retirement, including discontinued 
service or voluntary early retirement.
    Section 5 CFR 351.606(b)(1) also provides the same election option 
so that an employee who is being involuntarily separated from an agency 
because of reduction in force may use annual leave for the purpose of 
acquiring initial eligibility under 5 U.S.C. 8905 to continue health 
benefits into retirement.
    Section 5 CFR 351.606(b)(2) provides that an employee who is being 
involuntarily separated as an adverse action because of the employee's 
decision to decline relocation (including transfer of function) may use 
annual leave to remain on the agency's rolls after the effective date 
of the relocation to establish initial eligibility for immediate 
retirement under 5 U.S.C. 8336, 8412, or 8414 (including discontinued 
service or voluntary early retirement), and/or to establish initial 
eligibility under 5 U.S.C. 8905 to continue health benefits coverage 
into retirement.
    Section 5 CFR 351.606(b)(3) provides that the entitlements under 5 
U.S.C. 6302(g) apply to employees covered by chapter 63 of title 5, 
United States Code.
    Section 5 CFR 351.606(b)(4) provides that an agency may not retain 
any employee under the provisions of 5 U.S.C. 6302(g) past the date 
that the employee first becomes eligible for immediate retirement, and/
or for continuation of health benefits into retirement.
    Section 5 CFR 351.606(b)(5) provides that, except as permitted by 5 
CFR 351.608(d), an agency may not approve an employee's use of any 
other type of leave after the employee has been retained under a 
temporary exception.
    Section 5 CFR 351.606(b)(6) clarifies that the annual leave that 
may be used for the purpose of remaining on an agency's rolls to 
establish eligibility for immediate retirement and/or establish initial 
eligibility to continue health benefits coverage into retirement is 
described in 5 CFR 630.212.
    Section 630.212 states that all accumulated, accrued, and restored 
annual leave to an employee's credit prior to the effective date of a 
reduction in force or relocation and annual leave earned by an employee 
while in a paid leave status after the effective date of the reduction 
in force or relocation may be used for these purpose. However, annual 
leave that is advanced to an employee under 5 U.S.C. 6302(d) may not be 
used for these purposes. In addition, an employing agency may permit an 
approved leave recipient to use for these purposes any or all annual 
leave donated under 5 CFR part 630,

[[Page 10682]]

subpart I, or made available under 5 CFR part 630, subpart J, as of the 
effective of the reduction in force or relocation.
    In conforming changes, section 5 CFR 351.606(a) is revised with a 
reference label, and former section 5 CFR 351.606(b) is found in a new 
section 5 CFR 351.606(c), also with a reference label.
    In another conforming change, section 5 CFR 351.608 is revised as a 
result of the entitlements provided under 5 U.S.C. 6302(g). Also, a new 
section 5 CFR 351.608(e) provides that an employee who is not covered 
by chapter 63 of title 5, United States Code, but who is being 
involuntarily separated from an agency because of reduction in force 
under part 5 CFR 351, may, at the agency's discretion, elect to use 
annual leave past the date that the employee would otherwise have been 
separated for the purpose of establishing initial eligibility under 
sections 5 U.S.C. 8336, 8412, or 8414 (or other authority) for 
immediate retirement, including discontinued service or voluntary early 
retirement, and/or establishing eligibility under 5 U.S.C. 8905 (or 
other authority) to continue health benefits coverage into retirement.
    An additional conforming change revises section 351.506(b) to 
provide, consistent with prior policy, that the retention standing of 
each employee retained in a competitive level as an exception under 
section 351.606(b), as well as sections 351.607 or section 351.608, is 
determined as of the date the employee would have been released had the 
exception not been used. The retention standing of each employee 
retained under any of these three exceptions remains fixed until 
completion of the reduction in force action which resulted in the 
mandatory or permissive temporary retention.

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 it would 
be contrary to the public interest to delay access to benefits. Also, 
pursuant to 5 U.S.C. 553(d)(3), I find that good cause exists to make 
this amendment effective in less than 30 days. The delay in the 
effective date is being waived because these regulations provide a 
benefit authorized by statute rather than eliminating or modifying 
existing benefits. This amendment gives full effect to the benefits 
extended by the amended provisions of the statute at the earliest 
practicable date.

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.

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 Parts 351 and 630

    Administrative practice and procedure, Government employees.

U.S. Office of Personnel Management.
James B. King,
Director.

    Accordingly, OPM is amending parts 351 and 630 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. In Sec. 351.506, paragraph (b) is revised to read as follows:


Sec. 351.506  Effective date of retention standing.

* * * * *
    (b) The retention standing of each employee retained in a 
competitive level as an exception under Sec. 351.606(b), Sec. 351.607, 
or Sec. 351.608, is determined as of the date the employee would have 
been released had the exception not been used. The retention standing 
of each employee retained under any of these provisions remains fixed 
until completion of the reduction in force action which resulted in the 
temporary retention.
* * * * *
    3. Sec. 351.606 is revised to read as follows:


Sec. 351.606  Mandatory exceptions.

    (a) Armed Forces restoration rights. When a agency applies 
Sec. 351.601 or Sec. 351.605, it shall give retention priorities over 
other employees in the same subgroup to each group I or II employee 
entitled under 38 U.S.C. 2021 or 2024 to retention for, as applicable, 
6 months or 1 year after restoration, as provided in part 353 of this 
chapter.
    (b) Use of annual leave to reach initial eligibility for retirement 
or continuance of health benefits. (1) An agency shall make a temporary 
exception under this section to retain an employee who is being 
involuntarily separated under this part, and who elects to use annual 
leave to remain on the agency's rolls after the effective date the 
employee would otherwise have been separated by reduction in force, in 
order to establish initial eligibility for immediate retirement under 5 
U.S.C. 8336, 8412, or 8414, and/or to establish initial eligibility 
under 5 U.S.C. 8905 to continue health benefits coverage into 
retirement.
    (2) An agency shall make a temporary exception under this section 
to retain an employee who is being involuntarily separated under 
authority of part 752 of this chapter because of the employee's 
decision to decline relocation (including transfer of function), and 
who elects to use annual leave to remain on the agency's rolls after 
the effective date the employee would otherwise have been separated by 
adverse action, in order to establish initial eligibility for immediate 
retirement under 5 U.S.C. 8336, 8412, or 8414, and/or to establish 
initial eligibility under 5 U.S.C. 8905 to continue health benefits 
coverage into retirement.
    (3) An employee retained under paragraph (b) by this section must 
be covered by chapter 63 of title 5, United States Code.
    (4) An agency may not retain an employee under paragraph (b) of 
this section past the date that the employee first becomes eligible for 
immediate retirement, or for continuation of health benefits into 
retirement, except that an employee may be retained long enough to 
satisfy both retirement and health benefits requirements.
    (5) Except as permitted by 5 CFR 351.608(d), an agency may not 
approve an employee's use of any other type of leave after the employee 
has been retained under a temporary exception authorized by paragraph 
(b) of this section.
    (6) Annual leave for purposes of paragraph (b) of this section is 
described in Sec. 630.212 of this chapter.
    (c) Documentation. Each agency shall record on the retention 
register, for inspection by each employee, the reasons for any 
deviation from the order of release required by Sec. 351.601 or 
Sec. 351.605.
    4. Section 351.608 is revised to read as follows:


Sec. 351.608  Permissive temporary exceptions.

    (a) General. (1) In accordance with this section, an agency may 
make a temporary exception to the order of release in Sec. 351.601, and 
to the action provisions of Sec. 351.603, when needed to retain an 
employee after the effective date of a reduction in force. Except as

[[Page 10683]]

otherwise provided in paragraphs (c) and (e) of this section, an agency 
may not make a temporary exception for more than 90 days.
    (2) After the effective date of a reduction in force action, an 
agency may not amend or cancel the reduction in force notice of an 
employee retained under a temporary exception so as to avoid completion 
of the reduction in force action. This does not preclude the employee 
from receiving or accepting a job offer in the same competitive area in 
accordance with a Reemployment Priority List established under part 
330, subpart B, of this chapter, or under a Career Transition 
Assistance Plan established under part 330, subpart E, of this chapter, 
or equivalent programs.
    (b) Undue interruption. An agency may make a temporary exception 
for not more than 90 days when needed to continue an activity without 
undue interruption.
    (c) Government obligation. An agency may make a temporary exception 
to satisfy a Government obligation to the retained employee without 
regard to the 90-day limit set forth under paragraph (a)(1) of this 
section.
    (d) Sick leave. An agency may make a temporary exception to retain 
on sick leave a lower standing employee covered by chapter 63 of title 
5, United States Code (or other applicable leave system for Federal 
employees), who is on approved sick leave on the effective date of the 
reduction in force, for a period not to exceed the date the employee's 
sick leave is exhausted. Use of sick leave for this purpose must be in 
accordance with the requirements in part 630, subpart D, of this 
chapter (or other applicable leave system for Federal employees). 
Except as authorized by Sec. 351.606(b), an agency may not approve an 
employee's use of any other type of leave after the employee has been 
retained under this paragraph (d).
    (e)(1) An agency may make a temporary exception to retain on 
accrued annual leave a lower standing employee who:
    (i) Is being involuntarily separated under this part;
    (ii) Is covered by a Federal leave system under authority other 
than chapter 63 of title 5, United States Code; and,
    (iii) Will attain first eligibility for an immediate retirement 
benefit under 5 U.S.C. 8336, 8412, or 8414 (or other authority), and/or 
establish eligibility under 5 U.S.C. 8905 (or other authority) to carry 
health benefits coverage into retirement during the period represented 
by the amount of the employee's accrued annual leave.
    (2) An agency may not approve an employee's use of any other type 
of leave after the employee has been retained under this paragraph (e).
    (3) This exception may not exceed the date the employee first 
becomes eligible for immediate retirement or for continuation of health 
benefits into retirement, except that an employee may be retained long 
enough to satisfy both retirement and health benefits requirements.
    (4) Accrued annual leave includes all accumulated, accrued, and 
restored annual leave, as applicable, in addition to annual leave 
earned and available to the employee after the effective date of the 
reduction in force. When approving a temporary exception under this 
provision, an agency may not advance annual leave or consider any 
annual leave that might be credited to an employee's account after the 
effective date of the reduction in force other than annual leave earned 
while in an annual leave status.
    (f) Other exceptions. An agency may make a temporary exception 
under this section to extend an employee's separation date beyond the 
effective date of the reduction in force when the temporary retention 
of a lower standing employee does not adversely affect the right of any 
higher standing employee who is released ahead of the lower standing 
employee. The agency may establish a maximum number of days, up to 90 
days, for which an exception may be approved.
    (g) Notice to employees. When an agency approves an exception for 
more than 30 days, it must:
    (1) Notify in writing each higher standing employee in the same 
competitive level reached for release of the reasons for the exception 
and the date the lower standing employee's retention will end; and
    (2) List opposite the employee's name on the retention register the 
reasons for the exception and the date the employee's retention will 
end.

PART 630--ABSENCE AND LEAVE

    5. The authority citation for part 630 continues to read as 
follows:

    Authority: 5 U.S.C. 6311; Sec. 630.301 also issued under Pub. L. 
103-356, 108 Stat. 3410; Sec. 630.303 also issued under 5 U.S.C. 
6133(a); Secs. 630.306 and 630.308 also issued under 5 U.S.C. 
6304(d)(3), Pub. L. 102-484, 106 Stat. 2722, and Pub. L. 103-337, 
108 Stat. 2663; subpart D also issued under Pub. L. 103-329, 108 
Stat. 2423; Sec. 630.501 and subpart F also issued under E.O. 11228, 
30 FR 7739, 3 CFR 1974 Comp., p. 163; subpart G also issued under 5 
U.S.C. 6305; subpart H also issued under 5 U.S.C. 6326; subpart I 
also issued under 5 U.S.C. 6332, Pub. L. 100-566, 102 Stat. 2834, 
and Pub. L. 103-103, 107 Stat. 1022, subpart J also issued under 5 
U.S.C. 6362, Pub. L. 100-566, and Pub. L. 103-103; subpart K also 
issued under Pub. L. 102-25, 105 Stat. 92; and subpart L also issued 
under 5 U.S.C. 6387 and Pub. L. 103-3, 107 Stat. 23.

    6. In part 630, Sec. 630.212 is added to read as follows:


Sec. 630.212  Use of annual leave to establish initial eligibility for 
retirement or continuation of health benefits.

    (a) An employee may elect to use annual leave and remain on the 
agency's rolls in order to establish initial eligibility for immediate 
retirement under 5 U.S.C. 8336, 8412, or 8414, and/or to establish 
initial eligibility under 5 U.S.C. 8905 to continue health benefits 
coverage into retirement, as provided in:
    (1) Section 351.606(b)(1) for an employee who would otherwise have 
been separated by reduction in force procedures under part 351 of this 
chapter; or
    (2) Section 351.606(b)(2) of this chapter for an employee who would 
otherwise have been separated by adverse action procedures under 
authority of part 752 of this chapter because of the employee's 
decision to decline relocation (including transfer of function).
    (b)(1) Annual leave that may be used for the purposes described in 
paragraph (a) of this section includes all accumulated, accrued, and 
restored annual leave to the employee's credit prior to the effective 
date of the reduction in force or relocation (including transfer of 
function) and annual leave earned by an employee while in a paid leave 
status after the effective date of the reduction in force or relocation 
(including transfer of function).
    (2) Annual leave that is advanced to an employee under 5 U.S.C. 
6302(d), including any advance annual leave that may be credited to an 
employee's leave account after the effective date of the reduction in 
force or relocation (including transfer of function), may not be used 
for purpose of this section.
    (3) For purposes of this section, the employing agency may approve 
the use of any or all annual leave donated to an employee under part 
630, subpart I, of this chapter (Voluntary Leave Transfer Program), or 
made available to the employee under part 630, subpart J, of this 
chapter (Voluntary Leave Bank Program), as of the effective date of the 
reduction in force or relocation.

[FR Doc. 97-5835 Filed 3-7-97; 8:45 am]
BILLING CODE 6325-01-M