Time-off Awards FAQs
Awards regulations allow agencies to grant time off without charge to
leave or loss of pay as an award to recognize performance. Some frequently
asked questions about time-off awards include:
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Are there any limits to
the number of hours that can be granted as a time-off award? |
There are no Governmentwide limits on granting
time-off awards. However, agencies are free to establish their own
guidelines and limitations on how much time off is appropriate for
various employee contributions, as well as overall periodic limits
that may be useful for preserving the integrity of their time-off
award program and preventing abuse and/or criticism. |
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What regulatory limitations
apply to time-off awards? |
The regulations provide that time-off awards
shall not be converted to cash. Agencies will document a time-off
award, as well as cash awards, in compliance with the OPM operating
manual, Guide
to Processing Personnel Actions, and they must submit time-off
award, as well as cash award, data to the Central Personnel Data File
in compliance with the Office of Personnel Management operating manual,
Guide to the Central
Personnel Data File. |
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Why does the Office of
Personnel Management prohibit converting time-off awards to cash? |
The "currency" of a time-off
award is time, not money. A method for conversion would have to be
developed. The obvious, apparently straightforward solution is to
convert time to cash using an hourly rate of pay. However, lower-graded
employees may well find such salary-based conversion unfair. If a
mixed-grade group of employees were granted equal time-off awards
(which is a common practice), they would convert to cash very unequally.
In addition, several administrative issues are involved. For instance,
the administrative problems associated with "withdrawing"
a reported time-off award and "substituting" a cash award
would also wreak havoc on the integrity of agency and Office of Personnel
Management reports of award use. Although administrative concerns
ought not to drive sensible policy choices, they are serious enough
in this instance to leave the prohibition on conversion in place. |
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Can an agency offer an
employee the choice of time-off or a cash award? |
Technically, there is no legal bar to offering
that choice. However, the Office of Personnel Management strongly
recommends that agencies not offer such a choice. To do so would put
the employee who opts for time-off in "constructive receipt,"
for tax withholding purposes, of the cash award offered. Appropriate
withholding based on the cash award offered would have to be done
at the time the choice is offered (i.e., when the employee reasonably
would be expected to receive the cash), rather than based on the pay
associated with the time off when the time off is actually taken.
When offering the employee a choice between time off or cash as
an award, and if the employee chooses the time off, difficulties
arise:
- it will be difficult to explain to the employee the basis for
the unexpected additional tax withholding that occurs as a result
of the constructive receipt of the cash award; and
- the administrative burden on the agency may well be prohibitive
because agencies would be responsible when the choice of award
is offered for assuring that the initial withholding based on
the cash award offered is made at that time. When the time-off
award is actually used, the agency would be responsible for comparing
the amount already withheld for the cash award offered and the
amount that otherwise would be due based on the pay for the time
off. No additional withholding would be made if the tax due for
the time off is at least equal to the tax already withheld for
the cash offered. If pay for the time off is greater than the
cash award offered, an additional withholding is made on the difference
when the time-off award is used.
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Frequently Asked Questions