Mandatory exceptions.

(a) Armed Forces restoration rights. (1) When an agency applies § 351.601 or § 351.605, it must provide a mandatory exception for each competing employee entitled under § 353.209(b) to retention for, as applicable, 6 months or 1 year after restoration. (2) The agency shall first determine the employee's ordinary retention standing under subpart E of this part. The agency shall then apply this paragraph as a mandatory exception to the order of release. The agency may not release a restoration protected employee from his or her competitive level before the expiration of the applicable retention protection period if another competing employee may be released instead. (3) If no other competing employee may be released (such as when an entire competitive area is abolished pursuant to § 351.605), the agency may not separate the restoration protected employee by reduction in force during the applicable retention protection period. The agency must instead reassign the employee, as necessary, to another position of like seniority, status, and pay for which the employee is qualified, consistent with part 353 of this chapter. (4) If the entire agency is abolished and the employee's function has not been transferred to another agency, or if it is otherwise impossible or unreasonable for the agency to reassign the employee, OPM will offer placement assistance to the employee in accordance with 38 U.S.C. 4314 and § 353.110 of this chapter. (5) This paragraph does not: (i) Alter the restoration protected employee's retention standing under subpart E; (ii) Affect the agency's authority to take an action against a restoration protected employee under part 432 or 752 of this chapter; or (iii) Affect an agency's authority to make a mandatory, permissive continuing, or permissive temporary exception to the order of release under paragraph (b) of this section or § 351.607 or § 351.608 so long as required documentation is maintained and appropriate notice provided, and provided that such exception may not result in the discharge of a restoration protected employee during the period described in § 353.209(b). (6) For each restoration protected employee, the agency must document the employee's ordinary retention standing, the basis for the restoration protection, the date the protection expires, and any employee released because the restoration protected employee was passed over. The agency must maintain this documentation on the retention register or, if no retention register is prepared under § 351.605, in the agency's reduction in force records. (b) Use of annual leave to reach initial eligibility for retirement or continuance of health benefits. (1) An agency shall make a temporary exception under this section to retain an employee who is being involuntarily separated under this part, and who elects to use annual leave to remain on the agency's rolls after the effective date the employee would otherwise have been separated by reduction in force, in order to establish initial eligibility for immediate retirement under 5 U.S.C. 8336, 8412, or 8414, and/or to establish initial eligibility under 5 U.S.C. 8905 to continue health benefits coverage into retirement. (2) An agency shall make a temporary exception under this section to retain an employee who is being involuntarily separated under authority of part 752 of this chapter because of the employee's decision to decline relocation (including transfer of function), and who elects to use annual leave to remain on the agency's rolls after the effective date the employee would otherwise have been separated by adverse action, in order to establish initial eligibility for immediate retirement under 5 U.S.C. 8336, 8412, or 8414, and/or to establish initial eligibility under 5 U.S.C. 8905 to continue health benefits coverage into retirement. (3) An employee retained under paragraph (b) by this section must be covered by chapter 63 of title 5, United States Code. (4) An agency may not retain an employee under paragraph (b) of this section past the date that the employee first becomes eligible for immediate retirement, or for continuation of health benefits into retirement, except that an employee may be retained long enough to satisfy both retirement and health benefits requirements. (5) Except as permitted by 5 CFR 351.608(d), an agency may not approve an employee's use of any other type of leave after the employee has been retained under a temporary exception authorized by paragraph (b) of this section. (6) Annual leave for purposes of paragraph (b) of this section is described in § 630.212 of this chapter. (c) Documentation. Each agency shall record on the retention register, for inspection by each employee, the reasons for any deviation from the order of release required by § 351.601. [62 FR 10682, Mar. 10, 1997, as amended at 91 FR 49223, Aug. 3, 2026; 91 FR 54795, Aug. 25, 2026]