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Pay Questions and Answers

Grade and Pay Retention

Grade and Pay Retention: Miscellaneous

Q - If an employee with a permanent appointment accepts a temporary or term appointment at a lower grade as a result of reduction-in-force procedures, is the employee entitled to grade retention, provided all other requirements are met? If an employee already under grade retention converts from a permanent to a temporary or term appointment, is the entitlement to grade retention affected?

A - An employee is not eligible for grade retention if the employee was serving under a term or temporary appointment in the position from which he or she was downgraded. See 5 CFR 536.102(b)(2) and definition of employee in 5 U.S.C. 5361. However, the fact that the employee accepts a temporary or term appointment in conjunction with being downgraded does not affect the employee's entitlement to grade retention.

Similarly, if an employee who is already under grade retention receives a temporary or term appointment via reassignment or transfer, the employee would remain entitled to grade retention, unless one of the terminating events specified in law and regulation occur. (See 5 U.S.C. 5362(d) and 5 CFR 536.208. See also question 2, below.)
Q - How is an employee's preexisting entitlement to grade and pay retention affected by transfer to another agency?

A - If an employee is already under grade or pay retention prior to transferring to another agency, the gaining agency must continue the employee's grade or pay retention entitlement, absent the occurrence of one of the terminating events set forth in law and regulation, such as a break in service of 1 workday or more or reduction in grade at the employee's request. (See 5 U.S.C. 5362(d) and 5 CFR 536.208 regarding termination of grade retention and 5 U.S.C. 5363(c) and 5 CFR 536.308 regarding termination of pay retention. See also question 3, below.)
Q - When an employee who is already under grade or pay retention transfers to a new agency, how does that agency determine whether a reduction in grade at the employee's request occurred in conjunction with the transfer?

Since a reduction in grade at the employee's request is a terminating event, a determination as to whether such a reduction occurred must be made at the time an employee under grade or pay retention is transferred. This determination must be made based on the actual grade of the employee's position rather than the employee's retained grade. For example, if the true grade of the employee's position is GS-12 and his or her retained grade is GS-13, then acceptance of a GS-12 position upon transfer to another agency is not considered a reduction in grade at the employee's request.

In addition, the term reduced in grade or pay at the employee's request is defined in 5 CFR 536.103 to exclude any reduction in grade that is directly "caused or influenced by a management action." Thus, while a reduction in grade resulting from transfer to another agency may appear to be a voluntary movement, if that transfer was directly caused or influenced by a management action at the losing agency, the gaining agency must continue the employee's grade or pay retention.
Q - Can an employee establish initial entitlement to grade or pay retention upon transfer to another agency?

A - If an employee is reduced in grade or pay in conjunction with a transfer to another agency, there is no mandatory entitlement to grade or pay retention. However, the gaining agency may grant grade or pay retention under its optional authority (5 CFR 536.202 or 536.302), as long as the employee is otherwise qualified.

One of the eligibility conditions is that the reduction in grade or pay not be "at the employee's request" (5 CFR 536.102(b)(1)). If the transfer is initiated by the employee for his or her benefit, convenience, or personal advantage (including a transfer to avoid adverse action based on personal cause), it would be considered to be at the employee's request, thus barring grade or pay retention. However, if the transfer was directly caused or influenced by a management action (not based on personal cause), then even though the transfer appeared to be voluntary, it would not be "at the employee's request." (See definitions of management action and reduced in grade or pay at the employee's request in 5 CFR 536.103.)

For purposes of providing optional grade retention to a transferring employee, the management action must be either a specific RIF notice or a written announcement of a reorganization or reclassification that might result in reduction of the employee's grade. For purposes of optional pay retention, the management action must be an action that would result in a pay reduction (after the application of any applicable geographic conversion under 5 CFR 536.303(a) and in the absence of pay retention).

Note: A movement between subcomponents of an Executive department or other Executive agency cannot be considered a transfer. Under the law, the term "agency" includes Executive departments and certain other agencies. (See 5 U.S.C. 101-105, 5102(a), and 5361(2).) Thus, it is possible for mandatory grade and pay retention to apply to an employee who moves between subcomponents of an Executive department or other Executive agency--e.g., if the employee is placed in a lower-graded position at management initiative as a result of reduction-in-force procedures.
Q - Is it possible for an employee to retain a grade in which he or she has served for less than 52 consecutive weeks?

A - Under the law, an employee does not necessarily have to have 52 consecutive weeks at the grade held immediately before being downgraded in order to retain that grade under the grade retention provisions. Under 5 U.S.C. 5362(a), any employee who is placed as a result of reduction-in-force (RIF) procedures into a lower grade and who has served for 52 consecutive weeks or more in "one or more positions . . . at a grade or grades higher than that of the new position, is entitled to have the grade of the position held immediately before such placement" as the retained grade. [Emphasis added.] See also 5 CFR 536.203(a) and (c).

Thus, for example, assume an employee has 2 years of service at GS-12 and 10 weeks of service at GS-13 immediately prior to being downgraded to GS-11 as a result of RIF procedures. Even though he or she has only 10 weeks of service at the GS-13 level, the GS-12 service plus the GS-13 service gives the employee more than 52 consecutive weeks at one or more grades higher than that of the position to which the employee is being reduced (i.e., GS-11). Thus, the employee meets the 52 consecutive week requirement and is entitled to retain the grade of GS-13.

In contrast, if this employee were being reduced to a GS-12 position rather than a GS-11 position, the employee would not meet the 52 consecutive week requirement and could not retain the GS-13.

Grade and Pay Retention and Severance Pay Eligibility for Veterans Readjustment Appointees

Q - Is an employee holding a Veterans Readjustment Appointment (VRA) eligible for grade or pay retention upon reduction in grade or pay, or to severance pay upon involuntary separation (not for cause)?

A - Employees holding VRAs are not eligible for grade or pay retention upon reduction in grade or pay, or to severance pay upon involuntary separation (not for cause).

By law, grade and pay retention apply only to employees whose employment is on other than a temporary or term basis. (See the definition of employee in 5 U.S.C. 5361(1).) The grade and pay retention regulations define employed on a temporary or term basis as employment under an appointment having a definite time limitation or designated as temporary or term. (See 5 CFR 536.103.)

Similarly, the severance pay law does not apply to an employee serving under an appointment with a definite time limitation, unless the time-limited appointment is made effective within 3 calendar days after separation from a qualifying appointment without time limitation. (See the definition of employee in 5 U.S.C. 5595(a)(2)(ii) and the definition of non-qualifying appointment in 5 CFR 550.703.)

Under 5 CFR part 307, a VRA is limited to 2 years. Although employees are entitled to convert to a career or career-conditional appointment upon completion of the 2 years, this conversion right is contingent upon meeting the terms of the VRA--i.e., employees must satisfactorily complete (1) 2 years of substantially continuous service and (2) any education and training required under the VRA program. If employees do not complete these requirements, they are not converted to career or a career-conditional appointment, and their VRA ends. Therefore, for the purposes of grade and pay retention and severance pay, the VRA must be viewed as having a definite 2-year limitation. Because the VRA is time-limited, employees holding such appointments are not eligible for grade and pay retention or severance pay.

Hazardous Duty Pay (18 June 1997)

Q - Who can receive hazardous duty pay?
A - 5 U.S.C. 5545(d) provides that if an employee is covered by chapter 51 (Classification) and subchapter III of chapter 53 (General Schedule Pay Rates) of title 5, United States Code, then he or she may be eligible to receive hazardous duty pay. To receive hazardous duty pay, a General Schedule (GS) employee must also meet the requirements in 5 CFR 550.904.

(Note: Prevailing rate (wage) employees may be eligible to receive environmental differential pay under the separate provisions of 5 U.S.C. 5343(c)(4).)
Q - Can title 38 employees receive hazardous duty pay?
A - Some title 38 employees are not covered by chapter 51 and are classified under the title 38 qualification-based grading system. Such employees are not covered by the hazardous duty pay authority.
Q - Where are the hazard pay differentials established?
A - Appendix A of 5 CFR part 550, subpart I (as provided by 5 CFR 550.903(a)).
Q - Can an employee be paid hazardous duty pay for performing a type of duty not listed under appendix A of 5 CFR part 550, subpart I?
A - No. 5 U.S.C. 5545(d) requires the Office of Personnel Management to establish a schedule or schedules of hazard duty differentials and to prescribe regulations governing payment of the differentials. If a duty or type of work is not listed in appendix A, the employee cannot be paid a hazard duty differential.
Q - Who can establish a hazard pay differential?
A - Amendments to appendix A may be made by OPM on its own motion or at the request of an agency, as defined in 5 U.S.C. 5102(a)(1). (See 5 CFR 550.903(b).) The request for a hazard pay differential must be made by the head of an agency or an official who has been delegated the authority to act for the head of the agency in the matter concerned.
Q - What information are agencies required to submit with requests to amend appendix A?
A - 5 CFR 550.903(b) requires agencies to submit the following information with their amendment request:
1. the nature of the duty;
2. the degree to which the employee is exposed to the hazard or physical hardship;
3. the length of time during which the duty will continue to exist;
4. the degree to which control may be exercised over the hazard or physical hardship; and
5. the estimated annual cost to the agency if the request is approved.
Q - What additional information does OPM typically ask agencies to submit with requests to amend appendix A?
A - OPM typically asks agencies to submit the following information with amendment requests, as applicable:
1. a detailed description of the hazardous duty or physical hardship (i.e., explain what causes the hazard);
2. specific wording of the proposed category (as it would appear in appendix A), including the threshold for payment and the recommended percentage to be paid;
3. information on ways to mitigate the hazard (e.g., training, use of safety procedures and equipment);
4. information on the measures the agency has taken to practically eliminate the hazard;
5. an explanation of why the hazard is "unusual;"
6. information on Occupational Safety and Health Administration standards or other published material on safety for the work situation. Information on how the agency will determine whether the hazard is reduced to a less than significant level;
7. descriptions of and statistics on actual accidents or injuries that have occurred because of exposure to the hazard or physical hardship;
8. information on when a decision is made not to expose an employee to the hazard or physical hardship;
9. information about other Federal agencies that may be affected by such a category;
10. information on Federal Wage System employees in the agency that may be exposed to the hazard or physical hardship in the same manner; and
11. whether and in what manner the hazard has affected the classification of the position.
Q - Can OPM provide some examples of the reasons proposed categories have been denied in the past?
A - OPM has denied requests for new hazardous duty pay categories when--
1. the duties would involve remote or potential hazards rather than present or actual hazards--i.e., when the duty is not inherently hazardous and an accident or injury is unlikely;
2. adequate safeguards would reduce the risk to a less than significant level;
3. overseas post differentials already compensate or take into account the hardships and hazards encountered in overseas assignments, such as presence in a war zone;
4. the risk of exposure to the hazard is not directly connected with the performance of assigned duties;
5. the hazard would not be "unusual" and would be hard to distinguish from the ongoing hazards that are inherent in the job; or
6. the hazardous duty or physical hardship is already listed in appendix A.
Q - Explain the changes OPM made in the regulations in 1991 concerning taking a hazard into account in the classification of the position.
A - 5 CFR 550.904 allows an agency to approve payment of hazardous duty pay when the hazardous duty or physical hardship has not been taken into account in the classification of the position (i.e., the knowledge, skills, and abilities required to perform the duty are not considered in the classification of the position). If the hazardous duty has been taken into account in the classification of the position, an agency may authorize payment of hazardous duty pay only when the actual circumstances of the specific hazard or physical hardship have changed from that taken into account and described in the position description; and, when using the knowledge, skills, and abilities required for the position and described in the position description, the employee cannot control the hazard or physical hardship; thus, the risk is not reduced to a less than significant level.
Q - Can an employee be paid hazardous duty pay for voluntarily performing a hazardous duty listed in appendix A?
A - Hazardous duty pay may be paid only to employees who are assigned hazardous duties or duties involving physical hardship for which a differential is authorized. It may not be paid to an employee who undertakes to perform a hazardous duty on his or her own, without proper authorization, either expressed or implied. (5 CFR 550.904(a))
Q - If an employee performs a hazardous duty (as listed in appendix A) for a hour during the work shift, does he or she receive the hazard pay differential for only that hour?
A - No. When an employee performs a duty for which a hazard pay differential is authorized, the agency must pay the hazard pay differential for all of the hours in which the employee is in a pay status on the day on which the duty is performed. (5 CFR 550.905)
Q - What is the maximum amount of hazardous duty pay an employee may receive?
A - An employee may receive no more than 25 percent of his or her rate of basic pay. (5 U.S.C. 5545(d)(2))
Q - May an employee be paid hazardous duty pay for a hazard or physical hardship encountered on the way to work?
A - No. Hazardous duty pay is paid only for the hours in which the employee is in a pay status on the day on which the hazardous duty is performed. (5 CFR 550.905)
Q - May an employee receive hazardous duty pay during overtime hours?
A - Yes, because an employee is in a pay status during overtime hours. However, the hazardous duty pay is computed on the employee's hourly rate of basic pay, not his or her hourly overtime rate. (5 CFR 550.905 and 5 U.S.C. 5545(d)(2))
Q - Can hazardous duty pay be paid during hours of paid leave?
A - Yes, if a hazardous duty is performed on a day on which paid leave is taken. For example, if an employee performs a hazardous duty for 1 hour and then takes annual leave for the 7 hours remaining in his or her workday, the employee is paid hazardous duty pay for the entire 8-hour workday. (5 CFR 550.905)
Q - May hazardous duty pay be paid for periods of leave without pay?
A - No. Hazardous duty pay may only be paid while an employee is in a pay status. (5 CFR 550.905)
Q - Is hazardous duty pay included in the aggregate limitation on pay?
A - Yes. Hazardous duty pay is included in the aggregate limitation on pay (5 U.S.C. 5307), which limits an employee's aggregate compensation to the rate payable for level I of the Executive Schedule at the end of a calendar year. (See the definition of "aggregate compensation" in 5 CFR 530.202(4).)
Q - May an employee receiving annual premium pay (for regularly scheduled standby duty or administratively uncontrollable overtime work), or a criminal investigator receiving availability pay, receive hazardous duty pay?
A - 5 U.S.C. 5545(c)(1) & (2) authorize the payment of annual premium pay for regularly scheduled standby duty and administratively uncontrollable overtime work, and 5 U.S.C. 5545a(c) authorizes availability pay, instead of some other types of premium pay, including hazardous duty pay. Thus, hazardous duty pay may not be paid for hours of work for which an employee is paid these types of premium pay.
Q - Is hazardous duty pay included in the biweekly maximum limitation on premium pay?
A - No. The limitation on premium pay in 5 U.S.C. 5547(a) does not include hazardous duty pay.
Q - What does "Do." mean, as listed in the "Effective Date" column of appendix A?
A - "Ditto."
Q - May employees who have been incidentally exposed to asbestos (i.e., not directly connected with their assigned duties) receive hazardous duty pay for asbestos?
A - No. As stated in the description of asbestos duty in appendix A, agencies may pay hazardous duty pay for asbestos when the risk of exposure is directly connected with the performance of assigned duties. Employees should not be paid hazardous duty pay after being exposed to asbestos (or any other hazard) when the exposure is not triggered by their job duties. It cannot be paid because of an accidental exposure.
Q - Why do the provisions for hazardous duty pay for white-collar employees and environmental differential pay for blue-collar employees have different rules and rates?
A - Hazardous duty pay and environmental differential pay have separate legal authorities. The authority for hazardous duty pay is found in 5 U.S.C. 5545(d). The legal authority for environmental differential pay is found in 5 U.S.C. 5343(c)(4).
Q - If a Federal Wage System (FWS) employee receiving environmental differential pay (EDP) moves to a GS position that involves the performance of the same duty that prompted the payment of EDP, may the employee receive hazardous duty pay?
A - Yes, as long as the hazardous duty is listed in appendix A and exposure to the hazard meets the requirements of 5 CFR 550.904, the employee may receive the percentage authorized in appendix A for the hazardous duty.
Q - If an employee who occupies an FWS position retains a GS grade and performs a duty listed in appendix A, is he or she entitled to hazardous duty pay?
A - Yes. By law (5 U.S.C. 5362(c)), the retained grade of an employee must be treated as the grade of the employee's position for all purposes, including pay setting and pay administration. Thus, the agency must pay the employee under the rules that apply to the General Schedule pay system during the grade retention period. This includes any hazard pay differential that is appropriate for a GS employee who performs the actual duties assigned to the employee (i.e., in this case, the FWS duties). The employee is not entitled to an environmental differential paid to wage employees during the period of GS grade retention.

Holiday Premium Pay and Travel (PQA 99-2, February 4, 1999)

Q - Are employees entitled to holiday premium pay for the time they spend in work-related travel on a Federal holiday?

A - Employees generally are not entitled to holiday premium pay for the time they spend in work-related travel during holiday hours of their tours of duty. Holiday premium pay is paid only to employees who perform work on a holiday. (See 5 U.S.C. 5546(b).) The Comptroller General has ruled that the criteria in 5 U.S.C. 5542(b)(2) must be used to determine whether travel time is hours of work for holiday premium pay purposes. (These are the same criteria that are used to determine travel time as hours of work for title 5 overtime pay purposes. The criteria are also found in 5 CFR 550.112(g).) Time spent in a travel status is not hours of work for the purpose of paying premium pay, including holiday premium pay, unless it meets one of the criteria in 5 U.S.C. 5542(b)(2)(B) for crediting irregular or occasional hours of work for travel. The criteria state that time spent in a travel status away from the official duty station is not hours of employment unless the travel--

involves the performance of work while traveling (such as employment as a truck driver);
is incident to travel that involves the performance of work while traveling (such as "deadhead" travel performed by a truck driver to return an empty truck after unloading);
is carried out under arduous and unusual conditions (e.g., on unpaved roads); or
results from an event which could not be scheduled or controlled administratively by any individual or agency in the executive branch of the Government (such as training scheduled solely by a private firm or a job-related court appearance required by a court subpoena).

(See Comptroller General opinions B-82637, March 28, 1949; B-168726, January 28, 1970; and 50 Comp. Gen. 519 (1971).) Note that this guidance applies to both Fair Labor Standards Act (FLSA) exempt and nonexempt employees. The provisions on travel time as hours of work for FLSA overtime pay purposes under 5 CFR 551.422 do not apply to the payment of holiday premium pay. Although most employees do not receive holiday premium pay for time spent traveling on a holiday, they continue to be entitled to pay for the holiday in the same manner as if the travel were not required.

Note: Under 5 U.S.C. 5542(b)(2)(A), time spent traveling away from the official duty station is also hours of employment if the time spent is within the days and hours of an employee's regularly scheduled administrative workweek. However, this does not apply to travel time on a holiday for holiday premium pay purposes because an employee's regularly scheduled administrative workweek includes only periods of time in which an employee is regularly scheduled to work. The Comptroller General has ruled that travel time during holiday hours (whether driving or riding) is not work time and, therefore, does not fall within an employee's regularly scheduled administrative workweek. (See Comptroller General opinion B-160094, October 12, 1966, and the definition of "regularly scheduled administrative workweek" in 5 CFR 610.102.)

Questions and Answers on Compensatory Time Off for Travel

Order of Deductions from Pay (PQA 97-1, August 19, 1997)

Q - What is the proper order of precedence for applying deductions from the gross pay of Federal civilian employees when an employee's gross pay is not sufficient to cover all deductions?

A - Previously, the General Accounting Office (GAO) published a comprehensive order of precedence for salary deductions in title 6 of the GAO Policy and Procedures Manual for the Guidance of Federal Agencies. However, in March 1996, GAO eliminated the comprehensive order of precedence in response to the requirements of the Hatch Act Amendments of 1993 (Public Law 103-94). (See GAO transmittal sheet no. 6-33, March 22, 1996.)

Each employing agency is now responsible for establishing an order of precedence for applying deductions from the gross pay of its civilian employees when gross pay is not sufficient to cover all authorized deductions. The established order of precedence must comply with any applicable laws, regulations, or other legal authority, including the following regulations in title 5 of the Code of Federal Regulations (CFR): section 550.805(e) (dealing with back pay awards), section 550.1104 (dealing with debt collection via salary offset), section 581.105 (dealing with garnishments for child support and/or alimony), and section 582.103 (dealing with garnishments for commercial debt). Consistent with 5 U.S.C. 8334(a)-(c) and 8422(a)-(c), retirement deductions under the Civil Service Retirement System or the Federal Employees Retirement System must be made before any other deduction (except in the case of back pay as provided in 5 CFR 550.805(e)). Also, as required by 5 U.S.C. 5514(d), a levy pursuant to the Internal Revenue Code takes precedence over salary offsets under 5 U.S.C. 5514 (dealing with offsets to recover a debt due the United States Government).

Pay Setting: Expiration of a Temporary Appointment

Q - How is an employee's pay set when a temporary promotion is made permanent? How is the pay set if the employee's temporary promotion expires and the employee is returned to the lower grade and then subsequently promoted?

A - If a temporary promotion is made permanent immediately after the temporary promotion ends, the employee is not returned to the lower grade in order to process the permanent promotion. See 5 CFR 531.214(e). The agency must convert the temployee's temporary promotion to a permanent promotion without a change in pay. The appropriate action is to process the promotion (nature of action code 702) showing the higher grade as the grade before and after promotion. (See rules 5 and 6, Table 14-B, chapter 14, Office of Personnel Management's Guide to Processing Personnel Actions.) In effect, the promotion increase granted at the time of the temporary promotion is ratified and made permanent by the removal of the not-to-exceed-date limitation on the temporary promotion.

If there is any period of time between the end of a temporary promotion and the beginning of a permanent promotion, the employee must be returned to the lower grade. As required by 5 CFR 531.215(c), the agency must recompute the employee's rate of basic pay for the lower grade as if the employee had never been temporarily promoted. Also, the agency may choose, at its discretion, to apply the maximum payable rate rule in 5 CFR 531.221 if that would yield a higher rate. Whatever method is used, the resulting rate is the basis for any subsequent promotion.

With respect to the "maximum pay rate" rule, please note that an employee's highest previous rate may not be based on a rate received in a position to which the employee was temporarily promoted for less than 1 year, except upon permanent placement in a position at the same or higher grade. (See 5 CFR 531.223(b).) If an agency chooses to apply the maximum payable rate rule, it may set pay at any step equal to or less than the maximum payable rate, but not less than the rate to which the employee is entitled under the normal pay-setting rules.

Severance Pay: Effect of Reemployment by the U.S. Postal Service (PQA 97-1, August 19, 1997)

Q - If a separated employee is receiving severance pay under 5 U.S.C. 5595 and is reemployed by the Postal Service, is there any effect on his or her severance pay?

A - Yes. By law, severance payments must be discontinued when the recipient is "reemployed by the Government of the United States." (See 5 U.S.C. 5595(d).) The U.S. Postal Service is part of the U.S. Government. The fact that Postal Service employees are not entitled to receive severance pay under section 5595 (due to the exclusion at 5 U.S.C. 2105(e)) is irrelevant. (We note that past Postal Service employment is creditable service for purposes of computing an employee's severance pay fund. See 5 CFR 550.708(b).)

If the Postal Service job is without time limitation, severance payments are terminated. However, if the Postal Service job carries a definite time limitation, then severance payments are merely suspended for the duration of the time-limited appointment and may be resumed after separation. (See 5 CFR 550.710-711. Note: We plan to revise these regulations to clarify that, consistent with the law, any Federal employment terminates or suspends severance payments.)

Severance Pay: Resignation Qualifying for Severance Pay (January 23, 1996; revised April 2001)

Q - Under what circumstances may employees who resign before being involuntarily separated be treated as "involuntarily separated" for purposes of qualifying for severance pay?

A - Under current severance pay regulations (5 CFR 550.706), employees who resign because they expect to be involuntarily separated are considered to have been involuntarily separated for severance pay purposes ONLY IF they resign after receiving-

a specific written notice stating that the employee will be involuntarily separated by a particular action (e.g., reduction in force) on a particular date (see 5 CFR 550.706(a)(1); or
a general written notice of reduction in force or transfer of function that announces that all positions in the competitive area will be abolished or transferred to another commuting area by a particular date no more than 1 year after the date of the notice (see 5 CFR 550.706(a)(2)).

However, if the specific or general notice is cancelled before the resignation is effected, the resignation would not be qualifying for severance pay purposes. (See 5 CFR 550.706(c).

If the specific notice deals with involuntary separation by reduction-in-force (RIF) procedures, the notice must meet the conditions in 5 CFR part 351, subpart H. A general notice has no standing under the RIF program and is not subject to RIF rules. A general notice cannot be used to meet the RIF notice requirements in 5 CFR part 351, subpart H.

A Certification of Expected Separation under 5 CFR 351.807 is not a qualifying specific or general notice under the severance pay regulations.

Entitlement to certain benefits--such as training assistance, priority placement rights, appeal rights, etc.--may be affected by an employee's decision to resign in advance of an actual involuntary separation action. The employing agency should inform affected employees of these implications before they accept a resignation.

Even if a resignation is considered an "involuntary separation" under the severance pay rules, the employee may not be eligible for severance pay under 5 U.S.C. 5595 and 5 CFR part 550, subpart G, for other reasons. The employee must meet all applicable eligibility requirements.

Severance Pay: Separation for Medical Inability to Perform Duties (PQA 98-2, July 23, 1998)

Q - Does an employee who has been removed for medical inability to perform his or her duties have an entitlement to severance pay?

A - The applicable statute authorizes severance pay for employees who are "involuntarily separated from the service, not by removal for cause on charges of misconduct, delinquency, or inefficiency." (See 5 U.S.S. 5595(b).) A medical inability to perform one's duties is neither "misconduct" nor "delinquency;" therefore, the precise question is whether removal for such inability constitutes "inefficiency" for severance pay purposes.

The legislative history of the severance pay statute suggests at least two guidelines for interpreting its provisions. First, severance pay is intended to help individuals who lose their Federal jobs through no fault of their own. Second, severance pay benefits should be construed liberally in favor of the employee. Accordingly, an employee who is removed for inability to perform his or her duties may receive severance pay if the inability is caused by a medical condition that is beyond the employee's control. This determination should be made by the employing agency based on acceptable medical documentation provided by the employee.

Severance Pay: Temporary Appointments (PQA 98-3, July 23, 1998)

Q - If an employee receives a time-limited appointment that is qualifying for severance pay (i.e., effected within 3 days after separation from a qualifying permanent appointment), who is responsible for making severance payments--the agency at which the employee had a permanent appointment or the agency at which the employee had the time-limited appointment?

A - Severance pay liability rests with the agency employing the employee at the time of the involuntary separation that triggers the severance pay entitlement. In the scenario set forth in the question, the agency employing the employee in the time-limited job will be responsible for making severance payments when the time-limited appointment ends.

Any severance pay entitlement that an employee may have based on an involuntary separation from a permanent appointment is immediately terminated (not suspended) when the employee receives a qualifying temporary appointment. (See 5 CFR 550.711.) Severance pay for an employee in a qualifying temporary appointment is triggered by the involuntary separation from that appointment (including expiration of the appointment as provided in the definition of "involuntary separation" in 5 CFR 550.703) and is computed using the rate of basic pay at the time of separation from that temporary job. (See 5 CFR 550.709(b).) Thus, the agency employing the individual in a time-limited job is liable for any severance payments.

In contrast, if a temporary appointment is not qualifying for severance pay because the employee is hired 4 or more days after involuntary separation from a qualifying permanent appointment, the severance pay liability rests with the agency in which the employee had a permanent appointment. Severance payments by that agency are merely suspended during the temporary appointment.

Special Rates: Student Trainees

Q - Under what circumstances may student trainees be eligible for a special rate under 5 U.S.C. 5305?

A - Student trainees may be eligible for a special rate even though their series is not listed in a special rate authorization.

Student trainees are required to be officially classified in an occupational series ending in "99" for the appropriate occupational group. (See 5 CFR 213.3202(b)(14).) All student trainee positions should be titled "Student Trainee" followed by the parenthetical title consistent with the occupational field involved (e.g., GS-899 Student Trainee (Civil Engineering)).

Student trainees classified in a "99" occupational series are covered by a special rate table if (a) their officially classified parenthetical titles link directly to an official title for a covered series, (b) their positions are classified at one of the covered grades, (c) they fully meet the qualification requirements for the covered series and grade, and (d) they meet all other coverage requirements for the special rate table in question (e.g., official worksite location). In other words, a student trainee who is fully qualified to be classified in a series and grade that is covered by special rates is entitled to the appropriate special rate if the student trainee otherwise would be eligible but for the use of the "99" occupational series code.

This has been OPM's policy since 1988, when the requirement to classify all student trainees in "99" series was put into effect. (This policy was communicated to agencies via an OPM memorandum to agency personnel directors dated August 3, 1988.) Each agency should ensure that it is following this policy. If an agency determines that it has not been paying a student trainee a special rate to which the student trainee was entitled, back pay would be appropriate, consistent with 5 CFR part 550, subpart H.

Please note that for occupations with a positive educational requirement, student trainees must meet or exceed the minimum educational requirements for the given special rates-covered occupational series and grade, as well as any other criteria specified for that particular occupational series. For example, the minimum educational requirement at the GS-5 grade level may include a bachelor's degree in a specific field of study. In this situation, only those students who meet this requirement will be eligible for the special rate.

As part of a request for new or revised special rates, agencies may ask that student trainees in a covered occupational category be covered by special rates without regard to the qualification requirements that apply to employees in a regular occupational series (i.e., a series other than a student trainee series). OPM has authority to expressly provide in the special rate authorization that all student trainees in a given "99" occupational series with qualifying parenthetical titles are covered by the special rate table, if they are otherwise eligible. Absent such express authorization, coverage must be determined as described in the above paragraphs.

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