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Assignment of a Federal Employee to a Non-Federal Organization

Assignment of Employee

Under the Intergovernmental Personnel Act, a Federal employee, with his or her consent, may be assigned to a non-Federal organization either on detail or leave without pay (LWOP). In either case, the assignee remains an employee of the Federal agency and retains the rights and benefits attached to that status. Federal employees may receive within-grade increases and promotions as well as increases in pay due to across-the-board increases and increases in locality pay while on Intergovernmental Personnel Act assignments. In addition, Federal employees may earn premium pay (such as Title 5 overtime pay; Fair Labor Standards Act (FLSA) overtime pay; and night, Sunday, and holiday premium pay) for hours worked under an Intergovernmental Personnel Act assignment. The Federal rate of pay should include any applicable locality payment, special salary rate, cost-of-living allowance, or post differential associated with the appropriate official duty station .

The choice of the most appropriate type of assignment - detail or LWOP - is influenced by various factors, including the position and duties assigned to the employee, and the agency decisions concerning payment of expenses. Non-Federal positions which require the employee to exercise legal or fiscal authority, or to carry out supervisory responsibility, may more appropriately be filled by appointment, necessitating LWOP by the Federal employee.

An employee on a mobility assignment is still a Federal employee and personnel actions which would apply to a Federal employee, or to his or her position (e.g., reclassification, transfer of function, reassignment), continue to be applicable while the employee is on a mobility assignment. In no case can a Federal employee earn less on a mobility assignment than he or she would have received in his or her Federal position.

The rate of pay of an employee assigned to a federally funded research and development center may not exceed the rate of pay that the employee would receive for continued service in the position in the Federal agency from which assigned.

Federal employees are reminded, once again, that they are expected to obey conflict-of-interest laws and standards of conduct provisions applicable to them and similar standards maintained by non-Federal organizations (see p.4). The employee's agency is responsible for resolving fully any issues relating to a potential conflict-of-interest prior to approval of an assignment.

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Status of a Federal Employee on Detail

Federal employees on detail remain employees of their permanent agencies for all purposes except work and supervision, and are subject to agency established performance appraisal criteria and procedures covering detailed employees. The detailed employee's pay, allowances, privileges, rights, seniority, and other benefits are preserved and remain in effect during the assignment. He or she continues to receive pay, allowances, and benefits from the Federal agency, even though these costs may be reimbursed to the agency in whole or in part by the non-Federal organization. The Federal employee on detail may receive a supplemental salary from the non-Federal organization when the position to which he or she is assigned has a higher established rate of pay.

The Federal pay rate (including locality pay, cost-of-living allowances, etc.) for employees on Intergovernmental Personnel Act details should be based on their travel status and benefits. For those who receive temporary duty travel allowances (e.g., per diem), the employee's official duty station for pay purposes is the duty station the employee occupied before the Intergovernmental Personnel Act assignment. For those who receive relocation allowances, the employee's official duty station is the duty station of the Intergovernmental Personnel Act assignment. A detailed employee's contributions for retirement, Medicare, life insurance, and health benefits are withheld from his or her pay. If the detail is on a reimbursable basis, the agreement should indicate what portion of the total cost each of the two organizations agree to pay.

A detailed employee continues to earn leave under the Federal agency's leave system and to have appropriate absence from duty with the non-Federal organization charged against that leave. The responsibility for documenting leave for detailed employees should be specified in the assignment agreement. The 240-hour limit and the 720-hour limit on annual leave carryover remain in effect for non-Senior Executive Service (SES) and SES employees, respectively. All leave used, as well as hours worked, should be certified by the non-Federal organization to the Federal agency.

A detailed employee's workweek and hours of duty will be determined by the non-Federal organization. The employee will either be excused from duty on all Federal holidays without charge to leave or will receive holiday premium pay for work performed on a Federal holiday. He or she may be excused from duty by the non-Federal organization on a State or local holiday without charge to leave or loss of pay, but will not be entitled to premium pay if required to work on such a day.

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Status of a Federal Employee on LWOP

A Federal employee assigned to a non-Federal organization on Leave Without Pay is given an appointment in accordance with the terms of the written agreement and the personnel policies of that organization. A Federal employee on LWOP is paid by the non-Federal organization to which he or she is assigned. This salary may be more than the employee's current Federal salary. A supplemental salary payment must be made when the rate of pay of the non-Federal organization is less than the rate of pay the employee would have received in his or her Federal position. It cannot be paid in advance or as a lump sum. Whether an employee is entitled to supplemental pay is decided by the Federal agency official authorized to sign the written agreement and must be communicated to the employee before he or she agrees to the assignment. The supplemental pay may vary during the assignment depending on such things as promotion, within-grade increase, or pay plan revision, as well as across-the board increases or increases in locality rates which the employee would have received in his or her Federal position. An assignment agreement may provide for reimbursement to the Federal agency for the cost of supplemental pay.

The key to determining the Federal rate of pay for an employee on LWOP for an Intergovernmental Personnel Act assignment is the employee's travel status and benefits. If the employee is receiving temporary duty travel allowances, use the rate of pay for the duty station the employee occupied before the Intergovernmental Personnel Act assignment. If the employee is receiving change-in-station relocation allowances, use the rate of pay for the duty station of the Intergovernmental Personnel Act assignment.

A Federal employee on LWOP from a Federal position to a non-Federal organization is entitled to earn annual and sick leave to the same extent as if he or she had continued in the regular Federal position. Annual and sick leave balances are transferable both to and from these assignments, subject to the limitation prescribed for annual leave carryover by 5 USC section 6304. The assignment agreement should specify whether the non-Federal or Federal agency will pay for the cost of leave. The non-Federal organization, in accordance with its regulations and policies, will determine the employee's workweek, hours of duty, and the holidays to which he or she is entitled.

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Retirement, Medicare, Group Life Insurance, and Health Benefits for a Federal Employee on LWOP

An employee is entitled to receive full service credit while on assignment if he or she makes a written election to retain retirement coverage and continues to pay the employee's contribution into the Civil Service Retirement and Disability Fund (or other Federal retirement system). The employee's Federal agency will continue to make its matching contribution. If the employee elects to retain full retirement credit under the retirement system, the agreement should specify, when applicable, that he or she is exempt from making retirement contributions under any mandatory non-Federal retirement system.

If the employee elects not to pay the current contributions as indicated above, he or she will receive, if subject to the Civil Service Retirement System (CSRS) or the Federal Employees Retirement System (FERS), credit for as much of the LWOP as does not exceed six months in a calendar year. An employee who elects not to pay his or her contributions to the CSRS or FERS while on a mobility assignment cannot retroactively pay any foregone contributions.

If an employee is injured or disabled while on LWOP, he or she may not receive both a Federal disability and non-Federal compensation covering the same period. This provision does not bar the right of the employee to receive the benefit paying the greater amount, or his or her right to a Federal retirement annuity based on service, i.e., a non-disability annuity.

If the employee or his or her survivor elects to receive any benefit from a non-Federal retirement system based on the employee's service during the assignment which Office of Personnel Management determines is similar to the employee's Federal retirement system, no Federal retirement credit may be allowed for the time the employee was on the assignment. If the non-Federal salary for the employee on LWOP is greater than the basic pay of the employee's Federal position, the basic pay of the Federal position constitutes the maximum salary which may be considered for Federal retirement purposes.

Federal employees on LWOP are covered by social security, unless they had no social security coverage in their Federal employment because they were covered by full CSRS deductions.

All wages for employees on LWOP will be taxed the hospital insurance portion of the FICA tax for Medicare Part A coverage. Deductions must be withheld and reported in accord with Treasury Fiscal Requirements Manual Instructions.

An employee on LWOP is entitled to continue coverage for group life insurance and health benefits for the duration of the assignment - even if the LWOP exceeds one year. To continue these coverages, the employee must continue to pay his or her share of the premiums through the Federal agency and the agency will pay its share.

If the employee elects to be covered under the non-Federal organization's life insurance or health benefits program which the Office of Personnel Management determines is similar to the programs for Federal employees, the assigned employee is not entitled to continue his or her coverage under the Federal programs.

For retirement, Medicare and group life insurance purposes, the Federal agency is responsible for determining the applicable rate of basic pay in accordance with the provisions of 5 USC section 3373. The agency is also responsible for collecting, accounting for, and depositing in the respective accounts, all retirement, group life insurance, and health benefits payments required to protect the rights of the employee on LWOP; and accounting for and depositing in the respective funds all agency contributions. As part of the written agreement, the agency must furnish the employee with specific information about how, when, and where payments are to be submitted. The agency must also keep the employee informed on all developments which affect rates, coverage, and enrollment under the retirement, Medicare, life insurance, and health benefits programs (e.g., open seasons, new coverages, changes in laws).

Service on a LWOP assignment is creditable in full for Federal salary purposes including within-grade increases, and leave accrual. Determination of an acceptable level of competence for within-grade increase purposes under 5 CFR part 531, subpart D is waived for periods of service under an assignment to a non-Federal organization.

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Incentive Awards For Federal Employees on Intergovernmental Personnel Act Assignments

Federal employees are eligible to receive awards for contributions and suggestions related to their work on mobility assignments. In deciding whether a Federal employee on an Intergovernmental Personnel Act assignment should receive an award, agency officials should be particularly mindful of the relationship between the accomplishments of the assignment and the mission of the agency. There should be substantial benefit accruing to the Federal agency's programs and activities for the agency to grant a cash award. The costs of an award for a mobility assignee can be shared between the participating agencies.

If a non-Federal organization wishes to grant a cash award to a Federal employee on a mobility assignment, the employee's agency must be informed of the award, the reasons for it, and must concur in this action. If concurred with, a copy of the documentation should be retained in the employee's Official Personnel Folder. Such awards may be either cash or honor awards.

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Obligated Service Requirement

Regulations require that a Federal employee must agree, as a condition of accepting a mobility assignment, to return to the Federal Government and to serve for a period of time equal to the length of the assignment. If the employee fails to carry out this agreement, he or she must reimburse the Federal agency for its share of the costs of the assignment (exclusive of salary and benefits). Federal agency officials may waive this reimbursement for good and sufficient reason.

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Return to Duty

At the completion of a mobility assignment, the agency should return the employee to the same position he or she occupied at the time the assignment began or reassign the individual to another position of like pay and grade level. If promoted while on assignment, the employee should be returned to the new position at the completion of the assignment. If the return to duty is accompanied by a geographic move, the employee's total pay may be reduced because of a lower locality pay. This is not an adverse action because locality pay is not basic pay for adverse action purposes.

A returning employee who is not satisfied with the position in the Federal agency to which he or she will be assigned has the right to seek relief through appropriate agency channels. There is no provision for final administrative review by the Office of Personnel Management. If the position offered the returning employee is of a lower grade or pay than the position held immediately before the mobility assignment, the proposed action must be treated as an adverse action under 5 CFR part 752, when applicable.

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Last Updated: 09/2002