The Pentagon, which recently reduced the number of furlough days for its civilian employees, will allow only “limited exceptions” to restrictions on incentive payments for them.

New guidance spells out how the department will carry out an Office of Management and Budget directive restricting such payments government-wide due to sequestration.


The department is the largest federal agency with more than 750,000 employees, about 85 percent of whom must take six furlough days, a number that has been cut several times, most recently last week from 11. For most, the requirement to take one unpaid day off per week on average ends this week.

The memo, dated several days before that announcement, says that at the same time, “discretionary monetary awards should not be issued during sequestration unless agency counsel determines the awards are legally required.” That includes awards ordered by a third party, for example in an employee appeal, and those “stipulated as part of a collective bargaining agreement.”

The restriction does not apply to performance-based increases up a step in a pay grade; travel savings incentives; foreign language proficiency awards; recruitment, relocation and retention incentives; student loan repayments; suggestion and invention incentives; or time-off awards. “However, spending for these types of awards should occur only on a highly limited basis and in circumstances where necessary and critical to maintaining the mission,” it says.

DoD traditionally has been among the government’s heaviest users of student loan reimbursements and other incentive payments for recruitment and retention.

Meanwhile, “Managers are strongly encouraged to make full use of the many honorary awards available throughout the Department to recognize and reward hard work. Recognition in any form should be done publicly to maximize awareness that good performance and solid contributions will be recognized.”

While time-off awards remain an option, “managers should refrain from increasing time-off awards to compensate for the restrictions on cash awards.”

It adds: “All collective bargaining obligations must be met prior to implementing the provisions of either OMB or this supplemental guidance. Collective bargaining agreements or past practices may provide for a structure and minimum award amounts or percentages based on the ratings received by employees. Management must reach agreement with the union prior to implementing a change to an agreement or past practice. Management cannot unilaterally change the agreement or practice based on the prescribed limitations.”

The guidance also outlines policies for circumstances such as employees whose salaries are not paid from regular appropriations and those in special personnel systems whose performance awards are funded differently.