RECRUITMENT, RELOCATION, AND RETENTION BONUSES.

SEC. 101. RECRUITMENT, RELOCATION, AND RETENTION BONUSES.(a) Bonuses.—(1) In general.—Chapter 57 of title 5, United States Code, is amended by striking sections 5753 and 5754 and inserting the following:“§ 5753. Recruitment and relocation bonuses“(a)(1) This section may be applied to—“(A) employees covered by the General Schedule pay system established under subchapter III of chapter 53; and“(B) employees in a category approved by the Office of Personnel Management at the request of the head of an Executive agency.“(2) A bonus may not be paid under this section to an individual who is appointed to or who holds—118 STAT. 2306“(A) a position to which an individual is appointed by the President, by and with the advice and consent of the Senate;“(B) a position in the Senior Executive Service as a noncareer appointee (as such term is defined under section 3132(a)); or“(C) a position which has been excepted from the competitive service by reason of its confidential, policy-determining, policy-making, or policy-advocating character.“(3) In this section, the term ‘employee’ has the meaning given that term in section 2105, except that such term also includes an employee described in subsection (c) of that section.“(b) The Office of Personnel Management may authorize the head of an agency to pay a bonus under this section to an individual only if—“(1) the position to which such individual is appointed (as described in paragraph (2)(A)) or to which such individual moves or must relocate (as described in paragraph (2)(B)) is likely to be difficult to fill in the absence of such a bonus; and“(2) the individual—“(A) is newly appointed as an employee of the Federal Government; or“(B)(i) is currently employed by the Federal Government; and“(ii)(I) moves to a new position in the same geographic area under circumstances described in regulations of the Office; or“(II) must relocate to accept a position in a different geographic area.“(c)(1) Payment of a bonus under this section shall be contingent upon the employee entering into a written service agreement to complete a period of employment with the agency, not longer than 4 years. The Office may, by regulation, prescribe a minimum service period for purposes of this section.“(2)(A) The agreement shall include—“(i) the commencement and termination dates of the required service period (or provisions for the determination thereof);“(ii) the amount of the bonus;“(iii) the method of payment; and “(iv) other terms and conditions under which the bonus is payable, subject to the requirements of this section and regulations of the Office. “(B) The terms and conditions for paying a bonus, as specified in the service agreement, shall include—“(i) the conditions under which the agreement may be terminated before the agreed-upon service period has been completed; and “(ii) the effect of the termination. “(C) The required service period shall commence upon the commencement of service with the agency or movement to a new position or geographic area, as applicable, unless the service agreement provides for a later commencement date in circumstances and to the extent allowable under regulations of the Office, such as when there is an initial period of formal basic training.“(d)(1) Except as provided in subsection (e), a bonus under this section shall not exceed 25 percent of the annual rate of 118 STAT. 2307 basic pay of the employee at the beginning of the service period multiplied by the number of years (including a fractional part of a year, as determined under regulations of the Office) in the required service period of the employee involved.“(2) A bonus under this section may be paid as an initial lump sum, in installments, as a final lump sum upon the completion of the full period of service required by the agreement, or in a combination of these forms of payment. “(3) A bonus under this section is not part of the basic pay of an employee for any purpose. “(4) Under regulations of the Office, a recruitment bonus under this section may be paid to an eligible individual before that individual enters on duty. “(e) The Office may authorize the head of an agency to waive the limitation under subsection (d)(1) based on a critical agency need, subject to regulations prescribed by the Office. Under such a waiver, the maximum bonus allowable shall—“(1) be equal to the maximum that would be determined if subsection (d)(1) were applied by substituting ‘50’ for ‘25’; but“(2) in no event exceed 100 percent of the annual rate of basic pay of the employee at the beginning of the service period. Nothing in this subsection shall be considered to permit the waiver of any requirement under subsection (c).“(f) The Office shall require that an agency establish a plan for the payment of recruitment bonuses before paying any such bonuses, and a plan for the payment of relocation bonuses before paying any such bonuses, subject to regulations prescribed by the Office. “(g) The Office may prescribe regulations to carry out this section, including regulations relating to the repayment of a bonus under this section in appropriate circumstances when the agreed-upon service period has not been completed. “§ 5754. Retention bonuses“(a)(1) This section may be applied to—“(A) employees covered by the General Schedule pay system established under subchapter III of chapter 53; and“(B) employees in a category approved by the Office of Personnel Management at the request of the head of an Executive agency.“(2) A bonus may not be paid under this section to an individual who is appointed to or who holds—“(A) a position to which an individual is appointed by the President, by and with the advice and consent of the Senate;“(B) a position in the Senior Executive Service as a noncareer appointee (as such term is defined under section 3132(a)); or“(C) a position which has been excepted from the competitive service by reason of its confidential, policy-determining, policy-making, or policy-advocating character.“(3) In this section, the term ‘employee’ has the meaning given that term in section 2105, except that such term also includes an employee described in subsection (c) of that section.“(b) The Office of Personnel Management may authorize the head of an agency to pay a retention bonus to an employee if—118 STAT. 2308“(1) the unusually high or unique qualifications of the employee or a special need of the agency for the employee’s services makes it essential to retain the employee; and“(2) the agency determines that, in the absence of a retention bonus, the employee would be likely to leave—“(A) the Federal service; or “(B) for a different position in the Federal service under conditions described in regulations of the Office. “(c) The Office may authorize the head of an agency to pay retention bonuses to a group of employees in 1 or more categories of positions in 1 or more geographic areas, subject to the requirements of subsection (b)(1) and regulations prescribed by the Office, if there is a high risk that a significant portion of employees in the group would be likely to leave in the absence of retention bonuses. “(d)(1) Payment of a retention bonus is contingent upon the employee entering into a written service agreement with the agency to complete a period of employment with the agency.“(2)(A) The agreement shall include—“(i) the length of the required service period;“(ii) the amount of the bonus;“(iii) the method of payment; and “(iv) other terms and conditions under which the bonus is payable, subject to the requirements of this section and regulations of the Office. “(B) The terms and conditions for paying a bonus, as specified in the service agreement, shall include—“(i) the conditions under which the agreement may be terminated before the agreed-upon service period has been completed; and “(ii) the effect of the termination. “(3)(A) Notwithstanding paragraph (1), a written service agreement is not required if the agency pays a retention bonus in biweekly installments and sets the installment payment at the full bonus percentage rate established for the employee with no portion of the bonus deferred. “(B) If an agency pays a retention bonus in accordance with subparagraph (A) and makes a determination to terminate the payments, the agency shall provide written notice to the employee of that determination. Except as provided in regulations of the Office, the employee shall continue to be paid the retention bonus through the end of the pay period in which such written notice is provided. “(4) A retention bonus for an employee may not be based on any period of such service which is the basis for a recruitment or relocation bonus under section 5753.“(e)(1) Except as provided in subsection (f), a retention bonus, which shall be stated as a percentage of the employee’s basic pay for the service period associated with the bonus, may not exceed—“(A) 25 percent of the employee’s basic pay if paid under subsection (b); or “(B) 10 percent of an employee’s basic pay if paid under subsection (c). “(2)(A) A retention bonus may be paid to an employee in installments after completion of specified periods of service or in a single 118 STAT. 2309 lump sum at the end of the full period of service required by the agreement.“(B) An installment payment is derived by multiplying the amount of basic pay earned in the installment period by a percentage not to exceed the bonus percentage rate established for the employee.“(C) If the installment payment percentage established for the employee is less than the bonus percentage rate established for the employee, the accrued but unpaid portion of the bonus is payable as part of the final installment payment to the employee after completion of the full service period under the terms of the service agreement. “(D) For purposes of this paragraph, the bonus percentage rate established for an employee means the bonus percentage rate established for such employee in accordance with paragraph (1) or subsection (f), as the case may be.“(3) A retention bonus is not part of the basic pay of an employee for any purpose.“(f) Upon the request of the head of an agency, the Office may waive the limit established under subsection (e)(1) and permit the agency head to pay an otherwise eligible employee or category of employees retention bonuses of up to 50 percent of basic pay, based on a critical agency need. “(g) The Office shall require that, before paying any bonuses under this section, an agency shall establish a plan for the payment of any such bonuses, subject to regulations prescribed by the Office. “(h) The Office may prescribe regulations to carry out this section.” .(2) Clerical amendment.—The table of sections for chapter 57 of title 5, United States Code, is amended by striking the item relating to section 5754 and inserting the following: “5754. Retention bonuses.”. (3) Sense of congress.—It is the sense of the Congress that the Director of the Office of Personnel Management—(A) should, each time a bonus is paid under the amendment made by paragraph (1) to recruit or relocate a Federal employee from one Government agency to another within the same geographic area or to retain a Federal employee who might otherwise leave one Government agency for another within the same geographic area, be notified of that payment within 60 days after the date on which such bonus is paid; and(B) should monitor the payment of such bonuses (in the circumstances described in subparagraph (A)) to ensure that they are an effective use of the Federal Government’s funds and have not adversely affected the ability of those Government agencies that lost employees to other Government agencies (in such circumstances) to carry out their mission.(b) Relocation Payments.—Section 407 of the Federal Employees Pay Comparability Act of 1990 (5 U.S.C. 5305 note; 104 Stat. 1467) is repealed.(c) Reports.—(1) Recruitment and relocation bonuses.—(A) In general.—The Office of Personnel Management shall submit to the Committee on Governmental Affairs of the Senate and the Committee on Government Reform 118 STAT. 2310 of the House of Representatives annually, for each of the first 5 years during which section 5753 of title 5, United States Code (as amended by subsection (a)(1)) is in effect, a report on the operation of such section.(B) Contents.—Each report submitted under this paragraph shall include, with respect to the period covered by such report, a description of how the authority to pay bonuses under the section of title 5, United States Code, referred to in subparagraph (A) was used by the respective agencies, including, with respect to each such agency and each type of bonus under such section—(i) the number and dollar-amount of bonuses paid—(I) to individuals holding positions within each pay grade, pay level, or other pay classification; and(II) if applicable, to individuals who moved between positions that were in different agencies but the same geographic area (including the names of the agencies involved); and(ii) a determination of the extent to which such bonuses furthered the purposes of such section.(2) Retention bonuses.—(A) In general.—The Office of Personnel Management shall submit to the Committee on Governmental Affairs of the Senate and the Committee on Government Reform of the House of Representatives annually, for each of the first 5 years during which section 5754 of title 5, United States Code (as amended by subsection (a)(1)) is in effect, a report on the operation of such section.(B) Contents.—Each report submitted under this paragraph shall include, with respect to the period covered by such report, a description of how the authority to pay bonuses under the section of title 5, United States Code, referred to in subparagraph (A) was used by the respective agencies, including, with respect to each such agency—(i) the number and dollar-amount of bonuses paid—(I) to individuals holding positions within each pay grade, pay level, or other pay classification; and(II) if applicable, to prevent individuals from moving between positions that were in different agencies but the same geographic area (including the names of the agencies involved); and(ii) a determination of the extent to which such bonuses furthered the purposes of such section.(d) Effective Date and Application.—(1) Effective date.—Except as provided under paragraphs (2) and (3), this section shall take effect on the first day of the first applicable pay period beginning on or after the 180th day after the date of the enactment of this Act.(2) Application to agreements.—A recruitment or relocation bonus service agreement that was authorized under section 5753 of title 5, United States Code, before the effective date under paragraph (1) shall continue, until its expiration, to 118 STAT. 2311 be subject to such section as in effect on the day before such effective date.(3) Application to allowances.—Payment of a retention allowance that was authorized under section 5754 of title 5, United States Code, before the effective date under paragraph (1) shall continue, subject to such section as in effect on the day before such effective date, until the retention allowance is reauthorized or terminated (but no longer than 1 year after such effective date).