[Federal Register Volume 68, Number 177 (Friday, September 12, 2003)]
[Rules and Regulations]
[Pages 53667-53672]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 03-23132]



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  Federal Register / Vol. 68, No. 177 / Friday, September 12, 2003 / 
Rules and Regulations  

[[Page 53667]]



OFFICE OF PERSONNEL MANAGEMENT

5 CFR Part 575

RIN 3206-AK01


Extended Assignment Incentives

AGENCY: Office of Personnel Management.

ACTION: Interim rule with request for comments.

-----------------------------------------------------------------------

SUMMARY: The Office of Personnel Management is issuing interim 
regulations to implement a recent statutory amendment that authorizes 
the payment of extended assignment incentives to certain categories of 
Federal employees in positions located in a territory or possession of 
the United States, the Commonwealth of Puerto Rico, or the Commonwealth 
of the Northern Mariana Islands. The interim regulations establish the 
criteria and procedures for the payment of extended assignment 
incentives.

DATES: Effective Date: The interim regulations will become effective on 
September 12, 2003.
    Applicability Date: The interim regulations apply on the 1st day of 
the first applicable pay period beginning on or after September 12, 
2003.
    Comment Date: Comments must be received on or before November 12, 
2003.

ADDRESSES: Send or deliver comments to Donald J. Winstead, Deputy 
Associate Director for Pay and Performance Policy, Office of Personnel 
Management, Room 7H31, 1900 E Street NW., Washington, DC 20415, FAX: 
(202) 606-4264, or e-mail at [email protected].

FOR FURTHER INFORMATION CONTACT: Lee Kara by telephone at (202) 606-
2858; by fax at (202) 606-4264; or by e-mail at [email protected].

SUPPLEMENTARY INFORMATION: The Office of Personnel Management (OPM) is 
issuing interim regulations on the payment of extended assignment 
incentives authorized by section 207 of Public Law 107-273 (November 2, 
2002). Section 207 adds a new section 5757 to chapter 57 of title 5, 
United States Code, to permit the head of an Executive agency to pay an 
extended assignment incentive to certain Federal employees assigned to 
positions located in a territory or possession of the United States, 
the Commonwealth of Puerto Rico, or the Commonwealth of the Northern 
Mariana Islands.
    Public Law 107-273 provides that section 207 will become effective 
on the 1st day of the first applicable pay period beginning on or after 
6 months after the date of enactment of the Act (November 2, 2002). The 
6-month period ended on May 2, 2003. Since biweekly pay periods for 
Federal employees begin on a Sunday, this provision became effective on 
May 4, 2003, for most employees. However, for the few agencies using an 
alternative biweekly payroll cycle, the law became effective on May 11, 
2003.

Extended Assignment Incentives

    Congress provided authority to pay extended assignment incentives 
to assist agencies in retaining experienced, well-trained employees in 
a U.S. territory, possession, or commonwealth for a longer period than 
the employee's initial tour of duty. The interim regulations permit the 
head of an Executive agency to provide an extended assignment incentive 
to an employee if (1) the employee has completed at least 2 years of 
continuous service in one or more civil service positions located in a 
given territory or possession of the United States, the Commonwealth of 
Puerto Rico, or the Commonwealth of the Northern Mariana Islands; (2) 
the agency determines that replacing the employee with another employee 
possessing the required qualifications and experience would be 
difficult; and (3) the agency determines that it is in the best 
interest of the Government to encourage the employee to complete a 
specified additional period of employment with the agency in one of the 
covered locations. An employee must have completed the required 2 years 
of continuous service immediately before commencement of a service 
agreement to receive an extended assignment incentive. In determining 
whether it is in the best interest of the Government to retain the 
employee in a particular location, an agency may consider how the 
employee's departure would affect the agency's ability to carry out an 
activity or perform a function that the agency deems essential to its 
mission or to operate effectively. By law, the total amount of service 
an employee may perform in a particular territory, possession, or 
commonwealth under one or more extended assignment incentive service 
agreements with an agency may not exceed 5 years.
    The interim regulations require the head of the agency to establish 
an agency plan for authorizing extended assignment incentives. The plan 
must designate the agency officials with authority to review and 
approve incentive payments, agency criteria for authorizing extended 
assignment incentive payments and determining the amount of a payment, 
requirements governing service agreements, procedures for paying 
extended assignment incentives, and documentation and recordkeeping 
requirements sufficient to allow reconstruction of the action.
    Subject to the limitations in Sec.  575.506, any employee who meets 
the definition of ``employee'' under 5 U.S.C. 2105 is eligible to 
receive an extended assignment incentive, including employees in 
General Schedule positions, senior-level and scientific or professional 
positions, Senior Executive Service positions, and prevailing rate 
positions covered by the Federal Wage System. Any agency-wide 
limitations or prohibitions regarding the categories of employees that 
may receive an extended assignment incentive should be documented in 
the agency plan.
    An employee may receive an extended assignment incentive not to 
exceed the greater of (1) 25 percent of the annual rate of basic pay of 
the employee at the beginning of the service period times the number of 
years in the service period; or (2) $15,000 per year in the service 
period. The service period must begin on the first day of a pay period 
and end on the last day of a pay period. For example, assume an agency 
wishes to pay the maximum extended assignment incentive to an employee 
who signed an extended assignment

[[Page 53668]]

incentive service agreement to serve 39 pay periods (546 days) and his 
or her annual rate of basic pay at the beginning of the service period 
is $65,335. To determine the maximum extended assignment incentive 
payments the agency may authorize, the following calculations must be 
made: (1) $65,335 (annual rate) x .25 (25%) x 1.5 years (546/365) = 
$24,501; and (2) $15,000 x 1.5 years = $22,500. Thus, the employee may 
receive extended assignment incentive payments of up to $24,501.
    Extended assignment incentives are subject to the aggregate 
compensation limitation established by 5 U.S.C. 5307 and regulated in 5 
CFR part 530, subpart B. They constitute ``other similar payments'' 
under paragraph (14) of the definition of ``aggregate compensation'' in 
Sec.  530.202.
    Before paying an extended assignment incentive, an agency must 
require the employee to sign a written service agreement to complete a 
specified period of additional employment with the agency in one of the 
covered locations. The service agreement also must specify the amount 
of the incentive payment, the method of paying the incentive, the 
conditions under which an agreement may be terminated, the requirements 
and procedures for the repayment of incentive payments if an employee 
separates prior to completion of the service period, and any other 
terms and conditions for receiving and retaining extended assignment 
incentive payments. The method of paying the incentive may include an 
initial lump-sum payment, equal installments at the end of specified 
periods throughout the service period, variable payments at the end of 
specified periods, a final lump-sum payment, or a combination of 
payment methods.
    If an employee fails to fulfill the terms of the service agreement, 
he or she generally must reimburse the employing agency for the 
prorated share of any extended assignment incentive received for 
service not yet performed. (See Sec.  575.513.) For example, assume an 
employee signed a 364-day (26 pay period) service agreement and 
received the full amount of a $15,000 extended assignment incentive as 
an initial lump-sum payment. If the employee voluntarily separates 
after 20 pay periods (280 days), he or she would incur a debt equal to 
23.1 percent (84/364) of the incentive, or $3,465. The employee may 
keep 76.9 percent (280/364) of the incentive, or $11,535, unless the 
agency imposes an additional repayment penalty for not fulfilling the 
terms of the service agreement, as permitted by Sec.  575.513(e). While 
the head of an agency may waive any debt owed to the Federal Government 
under 5 U.S.C. 5584, if warranted, waivers should be rare because the 
employee agreed to the repayment conditions at the time he or she 
signed the service agreement.
    If an employee fails to complete the agreed-upon service period 
because of voluntary separation or transfer or another reason covered 
by Sec.  575.513, and the portion of the extended assignment incentive 
received to date is less than or equal to the prorated share 
attributable to the employee's completed service, the employee will 
have no repayment obligation unless the agency imposes an additional 
repayment penalty, as permitted under Sec.  575.513(f). However, if 
provided in the service agreement, the agency may have an obligation to 
pay an additional amount for service completed by the employee. For 
example, assume that an employee who signed a 364-day (26 pay period) 
service agreement will receive a total extended assignment payment of 
$24,501 in two equal installment payments--i.e., $12,250.50 at the end 
of 13 pay periods of completed service and $12,250.50 at the end of the 
required service period. The employee receives the first payment of 
$12,250.50 and then voluntarily separates after 20 pay periods (280 
days). If the service agreement provides that the employee is entitled 
to receive a prorated share of the planned extended assignment 
incentive based on the amount of service completed, he or she would 
receive an additional $6,590.77 (280/364 = 76.9%; 76.9% x $24,501 = 
$18,841.27; $18,841.27 - $12,250.50 = $6,590.77). On the other hand, if 
the service agreement provides that the employee would not receive any 
unpaid incentive amount in the event of voluntary separation from the 
position, then the employee would keep the $12,250.50 he or she 
received but would receive no additional payment.
    By law, an agency may not require repayment of an extended 
assignment incentive if an employee is involuntarily separated from his 
or her position or is involuntarily reassigned to a position stationed 
outside the particular area involved. Under the regulations, if such an 
employee has not received incentive payments equal to the prorated 
share of the planned incentive attributable to completed service, the 
agency must pay an additional incentive to make up the difference. No 
other additional payment may be made except as allowed by the service 
agreement. (See Sec.  575.511.) Parallel rules apply to employees whose 
service agreement is terminated unilaterally by the agency as described 
in Sec.  575.512.
    The determination to pay an extended assignment incentive must be 
made on a case-by-case basis for each employee. While an agency may 
identify targeted groups or organizational units performing functions 
that are deemed essential to the agency's mission for special 
consideration, incentive determinations must still be made on a case-
by-case basis for each employee. An extended assignment incentive may 
not be provided to an employee who is fulfilling the requirements of a 
service agreement for the payment of a recruitment or relocation bonus 
or to an employee who is receiving a retention allowance. (See 5 CFR 
part 575, subparts A, B, and C.)
    Under 5 U.S.C. 5757(d), OPM must consult with affected agencies and 
submit a report to Congress assessing the effectiveness of the extended 
assignment incentive authority as a strategic human resources 
management tool and make recommendations for any changes necessary to 
improve the effectiveness of the incentive authority. OPM's report is 
due no later than May 4, 2006, which is 3 years after the effective 
date of section 207 of Public Law 107-273. To assist OPM in preparing 
the report, the interim regulations require agencies to provide data on 
their use of extended assignment incentives and to evaluate the extent 
to which these payments improved the retention of employees for longer 
than their initial tour of duty. In addition, OPM, invites agencies to 
provide recommendations for changes necessary to improve the 
effectiveness of extended assignment incentives. The interim 
regulations require agencies to provide the requested information for 
the period from May 2, 2003, through December 31, 2005. Agency reports 
are due to OPM by February 15, 2006.

Waiver of Notice of Proposed Rule Making and Delay in Effective Date

    Pursuant to 5 U.S.C. 553(b)(3)(B), I find that good cause exists to 
waive the general notice of proposed rulemaking. Also, pursuant to 5 
U.S.C. 553(d)(3), I find that good cause exists for making this rule 
effective upon publication in the Federal Register. These regulations 
implement section 207 of Public Law 107-273, which took effect on the 
first day of the first pay period beginning on or after May 2, 2003. 
Certain provisions cannot be applied, however, unless OPM issues 
implementing regulations. The waiver of the requirements for proposed 
rulemaking and a delay in the effective date are necessary to ensure

[[Page 53669]]

timely implementation of the law as intended by Congress.

Regulatory Flexibility Act

    I certify that these regulations will not have a significant 
economic impact on a substantial number of small entities because they 
will affect only Federal agencies and employees.

E.O. 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 5 CFR Part 575

    Government employees, Wages.

    Office of Personnel Management.
Kay Coles James,
Director.

0
Accordingly, OPM is amending part 575 of title 5 of the Code of Federal 
Regulations as follows:

PART 575--RECRUITMENT AND RELOCATION BONUSES, RETENTION ALLOWANCES, 
SUPERVISORY DIFFERENTIALS, AND EXTENDED ASSIGNMENT INCENTIVES

0
1. The authority citation for part 575 is revised to read as follows:


    Authority: 5 U.S.C. 1104(a)(2), 5753, 5754, 5755, and 5757; Pub. 
L. 107-273, 116 stat. 1780; secs. 302 and 404 of the Federal 
Employees Pay Comparability Act of 1990 (FEPCA), Pub. L. 101-509, 
104 Stat. 1462 and 1466, respectively; E.O. 12748, 3 CFR, 1992 
Comp., p. 316.

0
2. A new subpart E is added to read as follows:
Subpart E--Extended Assignment Incentives
Sec.
575.501 Purpose.
575.502 Definitions.
575.503 Who may approve the payment of an extended assignment 
incentive?
575.504 What requirements must an agency satisfy before authorizing 
the payment of an extended assignment incentive?
575.505 What criteria must an agency use to determine who will 
receive an extended assignment incentive?
575.506 When is an agency prohibited from paying an extended 
assignment incentive?
575.507 What is the maximum extended assignment incentive that may 
be paid for a period of service?
575.508 What is the maximum amount of service that may be covered by 
an extended assignment incentive?
575.509 Is an extended assignment incentive considered basic pay for 
any purpose?
575.510 What requirements are associated with service agreements?
575.511 What happens when an employee is involuntarily separated or 
involuntarily reassigned prior to completion of the service period?
575.512 When may an agency terminate a service agreement?
575.513 What are the agency's and the employee's obligations when an 
employee fails to fulfill the terms of a service agreement?
575.514 What are an agency's monitoring responsibilities?
575.515 What records and reports are required?

Subpart E--Extended Assignment Incentives


Sec.  575.501  Purpose.

    This subpart contains OPM regulations implementing 5 U.S.C. 5757, 
which authorizes the payment of extended assignment incentives. Subject 
to the requirements of this subpart, an agency may pay an extended 
assignment incentive to eligible Federal employees assigned to 
positions located in a territory or possession of the United States, 
the Commonwealth of Puerto Rico, or the Commonwealth of the Northern 
Mariana Islands who agree to complete a specified additional period of 
employment with the agency in that location.


Sec.  575.502  Definitions.

    In this subpart:
    Agency means an ``Executive agency,'' as defined in 5 U.S.C. 105.
    Authorized agency official means the head of an agency or an 
official who is authorized to act for the head of the agency in the 
matter concerned.
    Employee means an employee of an agency who satisfies the 
definition of that term in 5 U.S.C. 2105.
    Involuntarily reassigned refers to a reassignment initiated by an 
agency against an employee's will and without he employee's consent for 
reasons other than cause on charges of misconduct, delinquency, or 
inefficiency.
    Involuntarily separated refers to a separation initiated by an 
agency against an employee's will and without the employee's consent 
for reasons other than cause on charges of misconduct, delinquency, or 
inefficiency. In addition, when an employee is separated because he or 
she declines to accept reassignment to another geographic area outside 
one of the covered locations, the separation is involuntary if the 
employee's position description or other written agreement does not 
provide for such reassignment. However, an employee's separation is not 
involuntary if, after such a written mobility agreement is added, the 
employee accepts one reassignment outside his or her particular 
territory, possession, or commonwealth, but subsequently declines 
another reassignment. An employee's separation as a result of 
disability retirement, a disability that prevents an employee from 
continuing Federal service or is the basis for separation by the agency 
as determined by acceptable medical evidence, or the death of an 
employee is considered to be an involuntary separation.
    Rate of basic pay means the rate of pay fixed by law or 
administrative action for the position held by an employee before 
deductions and exclusive of additional pay of any kind. For example, a 
rate of basic pay may not include nonforeign area cost-of-living 
allowances under 5 U.S.C. 5941, night shift differentials under 5 
U.S.C. 5343(f), or environmental differentials under 5 U.S.C. 
5343(c)(4).
    Service agreement means a written agreement between an agency and 
an employee under which the employee agrees to a specified period of 
employment with the agency in a particular territory, possession, or 
commonwealth in return for payment of an extended assignment incentive.
    Service period means an agreed-upon period of employment an 
employee is obligated to complete under a service agreement.
    Territory, possession, or commonwealth means a territory or a 
possession of the United States, the Commonwealth of Puerto Rico, or 
the Commonwealth of the Northern Mariana Islands.


Sec.  575.503  Who may approve the payment of an extended assignment 
incentive?

    An authorized agency official must review and approve the offer of 
an extended assignment incentive for an employee, including the amount 
of such incentive. The authorized agency official must be at a higher 
level than the official who made the initial decision to offer an 
extended assignment incentive, unless there is no official at a higher 
level in the agency.


Sec.  575.504  What requirements must an agency satisfy before 
authorizing the payment of an extended assignment incentive?

    Before paying an extended assignment incentive under this subpart, 
an agency must establish an extended assignment incentive plan. This 
plan must include the following elements:
    (a) The designation of authorized agency officials who must review 
and approve the payment of extended assignment incentives;
    (b) The categories of employees which are prohibited from receiving 
an extended assignment incentive;

[[Page 53670]]

    (c) The criteria that must be met or considered in authorizing 
extended assignment incentives, including criteria for determining the 
size of an incentive;
    (d) The requirements governing service agreements, including the 
obligations of the agency and the employee when the service period is 
not completed;
    (e) The procedures for paying extended assignment incentives; and
    (f) Documentation and recordkeeping requirements sufficient to 
allow reconstruction of the action.


Sec.  575.505  What criteria must an agency use to determine who will 
receive an extended assignment incentive?

    (a) An agency must base the payment of an extended assignment 
incentive on a written determination that--
    (1) The eligible employee has completed at least 2 years of 
continuous service immediately before the commencement of the service 
agreement in one or more civil service positions located in a 
particular territory, possession, or commonwealth;
    (2) It is in the best interest of the Government to encourage the 
employee to complete a specified additional period of employment with 
the agency in that location; and
    (3) Replacing the employee with another employee possessing the 
required qualifications and experience would be difficult.
    (b) In determining whether it is in the best interest of the 
Government to retain an employee under paragraph (a)(2) of this 
section, an agency may consider how the employee's departure would 
affect the agency's ability to operate effectively or to carry out an 
activity or perform a function which the agency deems essential to its 
mission.
    (c) Any determination to approve an extended assignment incentive 
must be made on a case-by-case basis for each employee. However, an 
agency may consider common factors that apply to a category of 
employees, such as past recruitment and retention problems or the 
anticipation of such problems in the future.


Sec.  575.506  When is an agency prohibited from paying an extended 
assignment incentive?

    (a) An extended assignment incentive may not be paid to the head of 
an agency, including an agency headed by a collegial body composed of 
two or more individual members.
    (b) An agency may not begin paying an extended assignment incentive 
to an otherwise eligible employee who is fulfilling the requirements of 
a service agreement for the payment of a recruitment or relocation 
bonus or who is receiving a retention allowance. (See 5 CFR part 575, 
subparts A, B, and C.)


Sec.  575.507  What is the maximum extended assignment incentive that 
may be paid for a period of service?

    (a) The total amount of extended assignment incentive payments that 
may be paid for a service period may not exceed the greater of--
    (1) An amount equal to 25 percent of the annual rate of basic pay 
of the employee at the beginning of the service period times the number 
of years (including fractions of a year) in the service period; or
    (2) $15,000 per year (including fractions of a year) in the service 
period.
    (b) For hourly rate employees who do not have a scheduled annual 
rate of basic pay, the annual rate in paragraph (a) of this section is 
computed by multiplying the applicable hourly rate in effect at the 
beginning of the service period by 2,087 hours.
    (c) The number of years in the service period is computed by 
dividing the total number of calendar days in the service period (as 
established under Sec.  575.510(a)) by 365 and rounding the result to 
two decimal places. For example, a service period covering 39 biweekly 
pay periods equals 546 days, and 546 days divided by 365 days equals 
1.50 years.


Sec.  575.508  What is the maximum amount of service that may be 
covered by an extended assignment incentive?

    An employee's total service under one or more extended assignment 
incentive service agreements with a particular agency for service in a 
particular territory, possession, or commonwealth may not exceed 5 
years. For this purpose, a year is equal to 365 days, resulting in a 
total service limit of 1,825 days.


Sec.  575.509  Is an extended assignment incentive considered basic pay 
for any purpose?

    No, an extended assignment incentive is not considered part of an 
employee's rate of basic pay for any purpose, nor is it included for 
the purpose of calculating a lump-sum payment for annual leave under 5 
CFR 550.1205.


Sec.  575.510  What requirements are associated with service 
agreements?

    (a) Before paying an extended assignment incentive, the agency must 
require the employee to sign a written service agreement to complete a 
specified period of employment with the agency in a particular 
territory, possession, or commonwealth. The service period must meet 
the following conditions:
    (1) The service period must begin on the first day of a pay period 
and end on the last day of a pay period; and
    (2) The service period must not cause an employee to exceed the 5-
year lifetime limitation described in Sec.  575.508.
    (b) In addition to the service requirement in paragraph (a) of this 
section, the service agreement may specify other terms and conditions 
of employment applicable to the employee. For example, the service 
agreement may specify the employee's work schedule, type of position, 
and performance level. In addition, the service agreement may address 
the extent to which periods of time on a detail, in a nonpay status, or 
in a paid leave status are creditable towards the completion of the 
service period.
    (c) The service agreement must specify the method of payment of an 
extended assignment agreement. The agency may choose to pay an extended 
assignment incentive in an initial lump-sum payment at the beginning of 
the service period, in installments at the end of specified periods 
throughout the service period (biweekly, monthly, quarterly, etc.), in 
a lump-sum payment at the end of the entire service period, or through 
a combination of payment methods.
    (d) The service agreement must include the conditions under which 
the employee would be required to repay an extended assignment 
incentive under Sec.  575.513.
    (e) The service agreement must specify the conditions under which 
the payment of an extended assignment incentive may be terminated by 
the agency under Sec.  575.512.
    (f) The service agreement must specify the conditions under which 
the agency may be obligated to pay an additional incentive payment for 
partially completed service, as provided in Sec.  575.513(d).
    (g) The service agreement must specify the conditions under which 
the agency may impose a repayment penalty under Sec.  575.513(e) for an 
employee who fails to fulfill the terms of the service agreement.
    (h) The service agreement must specify the conditions under which 
the agency may be obligated to pay an incentive payment attributable to 
some or all of the employee's uncompleted service for employees covered 
by Sec.  575.511 or Sec.  575.512.

[[Page 53671]]

Sec.  575.511  What happens when an employee is involuntarily separated 
or involuntarily reassigned prior to completion of the service period?

    An employee who is voluntarily separated or is involuntarily 
reassigned to a position outside the particular territory, possession, 
or commonwealth involved is not indebted to the Federal Government for 
any extended assignment incentive payments he or she has received. The 
employee is entitled to keep all incentive payments received and, if 
applicable, is entitled to receive any additional amount representing 
the difference between the amount received and the prorated share of 
the total incentive attributable to completed service. The employee may 
receive a portion or all of the incentive payment attributable to 
uncompleted service only to the extent provided in the service 
agreement.


Sec.  575.512  When may an agency terminate a service agreement?

    (a) An agency may unilaterally terminate a service agreement based 
solely on the business needs of the agency. For example, an authorized 
agency official may terminate a service agreement when the employee's 
position is affected by a reduction in force or when there are 
insufficient funds to continue the planned incentive payments.
    (b) If an agency terminates a service agreement under paragraph (a) 
of this section, the employee is entitled to keep all incentive 
payments received and, if applicable, is entitled to receive any 
additional amount representing the difference between the amount 
received and the prorated share of the total incentive attributable to 
completed service. The employee may receive a portion or all of the 
incentive payment attributable to uncompleted service only to the 
extent provided in the service agreement.


Sec.  575.513  What are the agency's and the employee's obligations 
when an employee fails to fulfill the terms of a service agreement?

    (a) This section does not apply when an employee is involuntarily 
separated or involuntarily reassigned to a position outside the 
particular territory, possession, or commonwealth involved, as provided 
in Sec.  575.511 or when an agency unilaterally terminates a service 
agreement under Sec.  575.112.
    (b) An employee is indebted to the Federal Government and must 
repay the paying agency for an appropriate portion of an extended 
assignment incentive received by the employee if--
    (1) The employee fails to complete the period of employment 
required in his or her service agreement; or
    (2) The employee violates any other condition specified in the 
service agreement that would trigger termination of the agreement.
    (c)(1) If an employee does not fulfill the terms of a service 
agreement under the circumstances prescribed in paragraph (b) of this 
section and has received incentive payments whose value as a percentage 
of the planned total sum of incentive payments for the entire service 
period exceeds the percentage reflecting the portion of the service 
period completed by the employee, he or she must repay the excess 
payment and any additional repayment penalty imposed by the agency 
under paragraph (e) of this section.
    (2) For example, consider an employee who signed a 364-day (26 pay 
period) service agreement and received the full amount of the extended 
assignment incentive as an initial lump-sum payment. If the employee 
voluntarily leaves after 20 pay periods (280 days), the employee will 
have received 100 percent of the total extended assignment incentive 
while completing only 76.9 percent (280/364) of the service period. The 
excess is 23.1 percent. Therefore, the employee must repay 23.1 percent 
(84/364) of the incentive. The employee is entitled to keep 76.9 
percent of the incentive, unless the agency imposes an additional 
repayment penalty for failure to fulfill the service agreement under 
paragraph (e) of this section.
    (d)(1) If an employee does not fulfill the terms of the service 
agreement under the circumstances prescribed in paragraph (b) of this 
section and has received incentive payments whose value as a percentage 
of the planned total sum of incentive payments for the entire service 
period is less than or equal to the percentage reflecting the portion 
of the service period completed by the employee, the employee has no 
repayment obligation unless the agency imposes an additional repayment 
penalty under paragraph (e) of this section. The agency may pay an 
additional incentive payment for some or all of the service completed 
by the employee if such additional payment is required by the service 
agreement. The total amount of incentive payments received by the 
employee may not exceed the prorated share of the planned incentive 
attributable to completed service.
    (2) For example, consider an employee who signed a 364-day (26 pay 
period) service agreement to receive a total extended assignment 
payment of $24,501 in two equal installment payments--i.e., $12,250.50 
at the end of 13 pay periods of completed service and $12,250.50 at the 
end of the required service period. If the employee voluntarily leaves 
after 20 pay periods (280 days), the employee will have received only 
50 percent of the total extended assignment incentive while completing 
76.9 percent (280/364) of the service agreement. The agency may pay the 
employee an additional amount of up to 26.9 percent of the incentive 
payment that is attributable to completed service, as allowed under the 
terms of the service agreement, assuming the agency does not impose an 
additional repayment penalty for failure to fulfill the service period 
under paragraph (e) of this section.
    (e) An agency may impose an additional repayment penalty on an 
employee who does not fulfill the terms of a service agreement. This 
repayment penalty is in addition to any repayment required by paragraph 
(c) of this section. The specific terms and conditions governing the 
repayment penalty must be included in the service agreement. For 
example, an agency may adopt a schedule or formula that provides for 
varying penalty amounts based on the portion of the service period 
completed by the employee.
    (f) If an employee fails to reimburse the paying agency for the 
full amount owed under this section, the amount outstanding must be 
recovered from the employee under the agency's regulations for 
collection by offset from an indebted Government employee under 5 
U.S.C. 5514 and 5 CFR part 550, subpart K, or through the appropriate 
provisions for debt collection if the individual is no longer a Federal 
employee. However, the head of the agency may waive the debt under 5 
U.S.C. 5584, if warranted.


Sec.  575.514   What are an agency's monitoring responsibilities?

    Each agency must monitor the use of extended assignment incentives 
to ensure that the agency's extended assignment incentive plan and the 
payment of extended assignment incentives are consistent with the 
requirements and criteria established under 5 U.S.C. 5757 and this 
subpart.


Sec.  575.515  What records and reports are required?

    (a) Each agency must keep a record of each determination required 
by this subpart and make such records available for review upon OPM's 
request.
    (b) Each agency must provide any information requested by OPM for 
its

[[Page 53672]]

report to Congress, as required by 5 U.S.C. 5757(d). Before February 
15, 2006, each agency must submit a written report to OPM on--
    (1) The agency's use of extended assignment incentives by providing 
the data required in paragraph (c) of this section;
    (2) Whether the use of extended assignment incentives influenced 
employees to stay longer than their initial tour of duty at their 
current duty stations; and
    (3) The agency's recommendations for changes necessary to improve 
the effectiveness of extended assignment incentives.
    (c) Each agency report must contain the following data for the 
period from May 2, 2003, to December 31, 2005:
    (1) The number of extended assignment service agreements that 
commenced in each fiscal year;
    (2) The dollar amount expended on extended assignment incentives in 
each fiscal year;
    (3) The number of employees who declined an extended assignment 
incentive, by occupational series and geographic location;
    (4) The number of employees who signed an extended assignment 
incentive service agreement, the total amount of the planned 
incentives, and the total number of years of agreed-upon service, by 
occupational series and geographic location;
    (5) The number of employees whose service agreements were 
terminated before completion of the agreed-upon service period, with 
subcounts showing the number covered by Sec.  575.511, Sec.  575.512, 
and Sec.  575.513, respectively.
    (6) The number of employees who incurred a repayment debt under 
Sec.  575.513 (including any repayment penalty under Sec.  575.513(e)) 
and the total amount of repayment debt incurred; and
    (7) The portion of the repayment debt that, as of December 31, 
2005--
    (i) Has been recovered;
    (ii) Is subject to ongoing collection efforts; and
    (iii) Has been waived or written off.
[FR Doc. 03-23132 Filed 9-11-03; 8:45 am]
BILLING CODE 6325-39-M