[Federal Register Volume 64, Number 66 (Wednesday, April 7, 1999)]
[Rules and Regulations]
[Pages 16797-16801]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-8587]



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  Federal Register / Vol. 64, No. 66 / Wednesday, April 7, 1999 / Rules 
and Regulations  

[[Page 16797]]


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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]
BILLING CODE 6325-01-P