June 23, 1999




MEMORANDUM FOR SEE DISTRIBUTION
SUBJECT: Department of Defense (DoD) Policy on Recruitment, Retention and
 Relocation Bonuses and Allowances for Nonappropriated Fund (NAF)
 Employees

In accordance with DoD 1401.1-M, subject policy became effective February 16, 1996. As reflected in that policy, recruiting and relocation bonuses and retention allowances are not part of basic pay for any purpose, to include retirement.

The following provisions apply:

Recruiting, relocation bonuses and retention allowances are authorized for Regular Full-time pay band employees as tools to assist managers in building and maintaining a quality work force. These bonuses and allowances are designed to offset unique problems where there is competition for employees with specialized skills in highly compensated private sector labor markets. They are not a substitute for Incentive Awards, pay adjustments, or foreign and non-foreign area allowances. Payment of these bonuses and allowances resolves a specific recruiting or retention problem and should not be a matter of routine. When a recruitment or relocation bonus is paid, a written service agreement must be completed by the employee covering a period of at least 6 months.

A recruiting bonus is a one-time lump-sum payment of up to 25 percent of annual basic pay. A recruiting bonus may only be offered to individuals newly hired to fill Regular Full-time pay band positions. The positions must be hard to fill and critical to the organization's mission. For purposes of eligibility, a newly hired employee is defined as an individual being hired to a NAF position for the first time, or one who is being reinstated or reemployed after a break in service of at least one year. An employee whose appropriated fund position is converted to NAF is ineligible for a recruiting bonus. The Installation Commander will establish the level of approval. Approvals require a written certification by the selecting official that without a recruiting bonus the organization would have great difficulty filling the position with a highly qualified candidate.

A relocation bonusL is a one-time lump sum payment of up to 25 percent of annual basic pay and may be offered to a current NAF employee to accept a Regular Full-time payband position in a different area requiring a PCS move. The relocation must be without a break in service. The bonus is intended for hard to fill positions that are critical to the organization's mission and also to induce employees to relocate to remote or to high cost areas. The relocation bonus is in addition to payments authorized for PCS movement. The Installation Commander will establish the level of approval. Approvals require written certification by the selecting official that without the bonus the organization would have great difficulty in getting high quality candidates to relocate to the area.

Retention allowance. Up to 25 percent of basic pay may be authorized to Regular Full-time pay band employees in positions without time limitation. A retention allowance is paid in the same manner and at the same time as basic pay, although it is not part of basic pay. The retention allowance may be paid for 26 pay periods following the effective date. Each allowance will be based on a determination that the unusually high, unique qualifications of the employee, or a special need of the activity for the employee's services make it essential to retain the employee and that in the absence of such an allowance the employee would be likely to leave the installation work force. The Installation Commander will establish the level of approval. Approvals require a written certification by the requesting official. An annual review 45 days prior to the anniversary date, will be made to recertify the need to continue payment of the retention allowance. The amount of the allowance may be reduced or terminated when it is determined that a lesser amount or no allowance at all would be sufficient to retain the employee, labor market conditions and recruitment of employees with the needed qualifications would be possible; the need for the service of the employee has lessened; or, budgetary considerations preclude payment. When a determination is made to reduce or terminate the retention allowance, the employee will be given a 30-day advance notice. This action is not grievable.

In the next several weeks we will be examining the implications of and gathering information on those employees who may have received these allowances and bonuses under prior interpretations of DoD policy.

As a reminder, recommend that this information be provided to recognized NAF Unions.

The point of contact is Ms. Sandy Curran, (703) 325-7762, DSN 221-7762,
or email currans@(email address expired).



//original signed//
David L. Snyder
Acting Deputy Assistant Secretary
(Civilian Personnel Policy)




DISTRIBUTION:
COMMANDER
U.S. ARMY EUROPE AND SEVENTH ARMY, ATTN: AEAGA-CN
U.S. ARMY FORCES COMMAND, ATTN: AFPI-CP
U.S. ARMY MATERIEL COMMAND, ATTN: AMCPE-C
U.S. ARMY TRAINING AND DOCTRINE COMMAND, ATTN: ATBO-C
U.S. ARMY MILITARY DISTRICT OF WASHINGTON, ATTN: ANCP-ZA
U.S. ARMY MEDICAL COMMAND, ATTN: MCPE-C
MILITARY TRAFFIC MANAGEMENT COMMAND, ATTN: MTPAL-HRC
U.S. ARMY PACIFIC, ATTN: APPE-CP
U.S. ARMY SOUTH, ATTN: SOCO-CP
U.S. ARMY COMMUNITY AND FAMILY SUPPORT CENTER, ATTN: CFSC-ZA;
CFSC-HR; CFSC-MS
DOD STARS AND STRIPES PUBLISHER, ATTN: ROBERT TAYLOR
EIGHTH U.S ARMY, ATTN: EAGA-CP

SUPERINTENDENT, U.S MILITARY ACADEMY, ATTN: MACP DIRECTOR

DEFENSE LOGISTICS AGENCY, ATTN: DLA-CAHS

GENERAL MANAGER
DRAGON HILL LODGE
SHADES OF GREEN
HALE KOA HOTEL
AFRC-GARMISCH