Lump-Sum
Payments For Annual Leave
Entitlement
An employee will receive a lump-sum payment for
any unused annual leave when he or she separates from Federal
service or enters on active duty in the armed forces and elects to
receive a lump-sum payment. Generally, a lump-sum payment will equal
the pay the employee would have received had he or she remained
employed until expiration of the period covered by the annual leave.
Calculating a Lump-Sum Payment
An agency calculates a lump-sum payment by multiplying the
number of hours of accumulated and accrued annual leave by the
employee's applicable hourly rate of pay, plus other types of pay
the employee would have received while on annual leave, excluding
any allowances that are paid for the sole purpose of retaining a
Federal employee in Government service (e.g., retention allowances
and physicians comparability allowances).
Types of Pay Included in
a Lump-Sum Payment
- Rate of basic pay
- Locality pay or other similar geographic adjustment
- Within-grade increase (if waiting period met on date of
separation)
- Across-the-board annual adjustments
- Administratively uncontrollable overtime pay, availability
pay, and standby duty pay
- Night differential (for FWS employees only)
- Regularly scheduled overtime pay under the Fair Labor
Standards Act for employees on uncommon tours of duty
- Supervisory differentials
- Nonforeign area cost-of-living allowances and post
differentials
- Foreign area post allowances
Return to
Federal Service
In calculating a lump-sum payment, an agency
projects forward an employee's annual leave for all the workdays
the employee would have worked if he or she had remained in Federal
service. By law, holidays are counted as workdays in projecting the
lump-sum leave period. If an employee is reemployed in the Federal service prior
to the expiration of the period of annual leave (i.e., the lump-sum
leave period), he or she must refund the portion of the lump-sum
payment that represents the period between the date of reemployment
and the expiration of the lump-sum period. An agency recredits
to the employee's leave account the amount of annual leave
equal to the days or hours of work remaining between the date of
reemployment and the expiration of the lump-sum leave period.
References:
5 U.S.C. 5551 and 6306
5 CFR part 550,
subpart L
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