[Code of Federal Regulations]
[Title 5, Volume 1, Parts 1 to 699]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR550.709]

[Page 524-525]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
                CHAPTER I--OFFICE OF PERSONNEL MANAGEMENT
 
PART 550--PAY ADMINISTRATION (GENERAL)--Table of Contents
 
                        Subpart G--Severance Pay
 
Sec. 550.709  Accrual and payment of severance pay.

    (a) Severance pay accrues on a day-to-day basis following the 
recipient's separation from Federal employment. If severance pay begins 
in the middle of a pay period, 1 day of severance pay accrues for each 
workday or applicable holiday left in the pay period at the same rate at 
which basic pay would have accrued if the recipient were still employed. 
Thereafter, accrual is based on days from Monday through Friday, with 
each day worth one-fifth of 1 week's severance pay. Accrual ceases when 
the severance pay entitlement is suspended or terminated, as provided in 
Secs. 550.710 and 550.711. If severance pay is suspended during a 
nonqualifying time-limited appointment as provided in Sec. 550.710, 
accrual will resume following separation from that appointment.
    (b) Severance payments must be made at the same pay period intervals 
that salary payments would be made if the recipient were still employed. 
The amount of the severance payment is computed using the recipient's 
rate of basic pay in effect immediately before separation, with credit 
for each day of severance pay accrual during the pay period 
corresponding to the payment date. A severance payment is subject to 
appropriate deductions for income and Social Security taxes. Severance 
payments are the responsibility of the agency employing the recipient at 
the time of the involuntary separation that triggered the current 
entitlement to severance pay.
    (c) When an individual receives severance pay as the result of an 
involuntary separation from a qualifying time-limited appointment, the 
severance payment is based on the rate of basic pay received at the time 
of that separation. Severance payments are the responsibility of the 
agency that employed the individual under the qualifying time-limited 
appointment.
    (d) When an individual is in a nonpay status immediately before 
separation,

[[Page 525]]

the amount of the severance payment is determined using the basic pay 
that he or she would have received if he or she had been in a pay status 
at the time of separation.
    (e) When an individual's severance pay fund is computed under 
Sec. 550.707(b) using an average rate of basic pay, that average rate is 
used to determine the amount of the severance payment. Exception: In the 
case of a seasonal employee, the agency may choose instead to use the 
employee's rate of basic pay at separation (as computed based on the 
employee's work schedule during the established seasonal work period) 
and then authorize severance payments only during that seasonal work 
period.
    (f) In the case of individuals who become employed by a 
nonappropriated fund instrumentality of the Department of Defense or the 
Coast Guard under the conditions described in 5 U.S.C. 5595(h)(4), 
payment of severance pay may be suspended consistent with the rules in 5 
U.S.C. 5595(h) and any supplemental regulations issued by the Department 
of Defense.
    (g) Notwithstanding paragraph (b) of this section, an agency may pay 
severance pay in a single lump sum if expressly authorized by law.

[64 FR 69177, Dec. 10, 1999]