§5597. Separation pay

(a) For the purpose of this section-

(1) the term "Secretary" means the Secretary of Defense;

(2) the term "defense agency" means an agency of the Department of Defense, as further defined under regulations prescribed by the Secretary; and

(3) the term "employee" means an employee of a defense agency, serving under an appointment without time limitation, who has been currently employed for a continuous period of at least 12 months, except that such term does not include-

(A) a reemployed annuitant under subchapter III of chapter 83, chapter 84, or another retirement system for employees of the Government; or

(B) an employee having a disability on the basis of which such employee is or would be eligible for disability retirement under any of the retirement systems referred to in subparagraph (A).

(b) In order to avoid or minimize the need for involuntary separations due to a reduction in force, base closure, reorganization, transfer of function, workforce restructuring (to meet mission needs, achieve one or more strength reductions, correct skill imbalances, or reduce the number of high-grade, managerial, or supervisory positions), or other similar action affecting 1 or more defense agencies, the Secretary shall establish a program under which separation pay may be offered to encourage eligible employees to separate from service voluntarily (whether by retirement or resignation).

(c) Under the program, separation pay may be offered by a defense agency only-

(1) with the prior consent, or on the authority, of the Secretary; and

(2) to employees within such occupational groups or geographic locations, or subject to such other similar objective and nonpersonal limitations or conditions, as the Secretary may require.

A determination of which employees are within the scope of an offer of separation pay shall be made only on the basis of consistent and well-documented application of the relevant criteria.

(d) Such separation pay-

(1) shall be paid in a lump-sum or in installments;

(2) shall be equal to the lesser of-

(A) an amount equal to the amount the employee would be entitled to receive under section 5595(c) if the employee were entitled to payment under such section; or

(B) $25,000;

(3) shall not be a basis for payment, and shall not be included in the computation, of any other type of Government benefit;

(4) shall not be taken into account for purposes of determining the amount of any severance pay to which an individual may be entitled under section 5595 based on any other separation; and

(5) if paid in installments, shall cease to be paid upon the recipient's acceptance of employment by the Federal Government, or commencement of work under a personal services contract, as described in subsection (g)(1).

(e) No amount shall be payable under this section based on any separation occurring after September 30, 2003.

(f) The Secretary shall prescribe such regulations as may be necessary to carry out this section.

(g)(1) An employee who receives separation pay under this section on the basis of a separation occurring on or after the date of the enactment of the Federal Workforce Restructuring Act of 1994 and accepts employment with the Government of the United States, or who commences work for an agency of the United States through a personal services contract with the United States, within 5 years after the date of the separation on which payment of the separation pay is based shall be required to repay the entire amount of the separation pay to the defense agency that paid the separation pay.

(2) If the employment is with an Executive agency, the Director of the Office of Personnel Management may, at the request of the head of the agency, waive the repayment if the individual involved possesses unique abilities and is the only qualified applicant available for the position.

(3) If the employment is with an entity in the legislative branch, the head of the entity or the appointing official may waive the repayment if the individual involved possesses unique abilities and is the only qualified applicant available for the position.

(4) If the employment is with the judicial branch, the Director of the Administrative Office of the United States Courts may waive the repayment if the individual involved possesses unique abilities and is the only qualified applicant available for the position.

(5) If the employment is without compensation, the appointing official may waive the repayment.

(h)(1)(A) In addition to any other payment that it is required to make under subchapter III of chapter 83 or chapter 84, the Department of Defense shall remit to the Office of Personnel Management an amount equal to 15 percent of the final basic pay of each covered employee.

(B) If the employee is one with respect to whom a remittance would otherwise be required under section 4(a) of the Federal Workforce Restructuring Act of 1994 based on the separation involved, the remittance under this subsection shall be instead of the remittance otherwise required under such section 4(a).

(2) Amounts remitted under paragraph (1) shall be deposited in the Treasury of the United States to the credit of the Civil Service Retirement and Disability Fund.

(3) For the purposes of this subsection-

(A) the term "covered employee" means an employee who is subject to subchapter III of chapter 83 or chapter 84 and to whom a voluntary separation incentive has been paid under this section on the basis of a separation occurring on or after October 1, 1997; and

(B) the term "final basic pay" has the meaning given such term in section 4(a)(2) of the Federal Workforce Restructuring Act of 1994.

(i)(1) Notwithstanding any other provision of this section, during fiscal year 2001, separation pay may be offered under the program carried out under this section with respect to workforce restructuring only to persons who, upon separation, are entitled to an immediate annuity under section 8336, 8412, or 8414 of this title and are otherwise eligible for the separation pay under this section.

(2) In the administration of the program under this section during fiscal year 2001, the Secretary shall ensure that not more than 1,000 employees are, as a result of workforce restructuring, separated from service in that fiscal year entitled to separation pay under this section.

(3) Separation pay may not be offered as a result of workforce restructuring under the program carried out under this section after fiscal year 2003.

(Added Pub. L. 102–484, div. D, title XLIV, §4436(a)(1), Oct. 23, 1992, 106 Stat. 2723 ; amended Pub. L. 103–226, §8(a), Mar. 30, 1994, 108 Stat. 118 ; Pub. L. 103–337, div. A, title III, §341(b)(1), Oct. 5, 1994, 108 Stat. 2720 ; Pub. L. 104–201, div. A, title XVI, §1612(a), Sept. 23, 1996, 110 Stat. 2739 ; Pub. L. 105–85, div. A, title XI, §1106(a), (b)(1), Nov. 18, 1997, 111 Stat. 1923 , 1924; Pub. L. 106–65, div. A, title XI, §1104(b), Oct. 5, 1999, 113 Stat. 777 ; Pub. L. 106–398, §1 [[div. A], title XI, §§1151, 1153(a)], Oct. 30, 2000, 114 Stat. 1654 , 1654A-319, 1654A-323.)

References in Text

The date of the enactment of the Federal Workforce Restructuring Act of 1994, referred to in subsec. (g)(1), is the date of enactment of Pub. L. 103–226, which was approved Mar. 30, 1994.

Section 4(a) of the Federal Workforce Restructuring Act of 1994, referred to in subsec. (h)(1)(B), (3)(B), is section 4(a) of Pub. L. 103–226, as amended, which is set out as a note under section 8331 of this title.

Amendments

2000-Subsec. (b). Pub. L. 106–398, §1 [[div. A], title XI, §1151(a)], inserted "workforce restructuring (to meet mission needs, achieve one or more strength reductions, correct skill imbalances, or reduce the number of high-grade, managerial, or supervisory positions)," after "transfer of function,".

Subsec. (c). Pub. L. 106–398, §1 [[div. A], title XI, §1151(b)(2)], inserted concluding provisions.

Subsec. (c)(2). Pub. L. 106–398, §1 [[div. A], title XI, §1151(b)(1)], inserted "objective and nonpersonal" after "similar".

Subsec. (d)(1). Pub. L. 106–398, §1 [[div. A], title XI, §1151(c)(1)], added par. (1) and struck out former par. (1) which read as follows: "shall be paid in a lump sum;".

Subsec. (d)(5). Pub. L. 106–398, §1 [[div. A], title XI, §1151(c)(2)–(4)], added par. (5).

Subsec. (g)(1). Pub. L. 106–398, §1 [[div. A], title XI, §1151(d)], inserted ", or who commences work for an agency of the United States through a personal services contract with the United States," after "employment with the Government of the United States".

Subsec. (i). Pub. L. 106–398, §1 [[div. A], title XI, §1153(a)], added subsec. (i).

1999-Subsec. (e). Pub. L. 106–65 substituted "September 30, 2003" for "September 30, 2001".

1997-Subsec. (e). Pub. L. 105–85, §1106(b)(1), substituted "September 30, 2001" for "September 30, 1999".

Subsec. (h). Pub. L. 105–85, §1106(a), added subsec. (h).

1996-Subsec. (g)(5). Pub. L. 104–201 added par. (5).

1994-Subsec. (e). Pub. L. 103–337 substituted "September 30, 1999" for "September 30, 1997".

Subsec. (g). Pub. L. 103–226 added subsec. (g).

Effective Date of 1996 Amendment

Section 1612(b) of Pub. L. 104–201 provided that: "The amendment made by subsection (a) [amending this section] shall apply with respect to employment accepted on or after the date of the enactment of this Act [Sept. 23, 1996]."

Limitations for Fiscal Years 2002 and 2003 on VSIP and VERA

Pub. L. 106–398, §1 [[div. A], title XI, §1153(b)], Oct. 30, 2000, 114 Stat. 1654 , 1654A-323, provided that:

"(1) Subject to paragraph (2), the Secretary of Defense shall ensure that, in each of fiscal years 2002 and 2003, not more than 4,000 employees of the Department of Defense are, as a result of workforce restructuring, separated from service entitled to one or more of the following benefits:

"(A) Voluntary separation incentive pay under section 5597 of title 5, United States Code.

"(B) Immediate annuity under section 8336(o) or 8414(d) of such title.

"(2) Notwithstanding sections 5597(e), 8336(o), and 8414(d) of title 5, United States Code, the Secretary of Defense may carry out the programs authorized in those sections during fiscal years 2002 and 2003 with respect to workforce restructuring only to the extent provided in a law enacted by the One Hundred Seventh Congress."

Voluntary Separation Incentives

Pub. L. 106–303, §2, Oct. 13, 2000, 114 Stat. 1064 , authorized the Comptroller General to provide voluntary separation incentive payments with respect to employees of the General Accounting Office during the period from Oct. 13, 2000 to Dec. 31, 2003 and specified terms and conditions of such incentive payments, required additional contribution to the Retirement Fund, defined pertinent terms, specified a numerical percentage limitation of the workforce permitted to receive such incentive payments, and authorized the Comptroller General to prescribe regulations to implement these provisions.

Pub. L. 106–117, title XI, Nov. 30, 1999, 113 Stat. 1595 , as amended by Pub. L. 106–419, title II, §207, Nov. 1, 2000, 114 Stat. 1842 , known as the "Department of Veterans Affairs Employment Reduction Assistance Act of 1999", authorized the Secretary of Veterans Affairs to submit a plan to the Director of the Office of Management and Budget for the payment of voluntary separation incentive payments, and upon approval thereof to pay voluntary separation incentive payments to eligible employees of the Department of Veterans Affairs only to the extent necessary to reduce or restructure the positions and functions identified by the plan, provided that the employees separate from service with the Department through Dec. 31, 2002, whether by retirement or resignation, defined "employee" for separation incentive purposes, and provided for additional contributions to the Retirement Fund, effect of subsequent employment with the Federal Government, and effect on agency employment levels.

Pub. L. 106–113, div. B, §1000(a)(2) [title V, §579], Nov. 29, 1999, 113 Stat. 1535 , 1501A-113, as amended by Pub. L. 106–429, §101(a) [title V, §584], Nov. 6, 2000, 114 Stat. 1900 , 1900A-56, authorized voluntary separation incentives for employees of the United States Agency for International Development who voluntarily separated (whether by retirement or resignation) on or before Dec. 31, 2001, and defined pertinent terms, provided for the development of an agency strategic plan and the approval of such plan by the Director of the Office of Management and Budget, required additional agency contributions to the Retirement Fund, specified the effect of subsequent employment with the Federal Government, mandated a reduction of agency employment levels, and authorized the Office of Personnel Management to prescribe regulations to implement these provisions.

Pub. L. 106–58, title I, §116, Sept. 29, 1999, 113 Stat. 439 , authorized the Treasury Inspector General for Tax Administration, during the period from Oct. 1, 1999 through Jan. 1, 2003, to offer voluntary separation incentives in order to provide the necessary flexibility to carry out the plan to establish and reorganize the Office of the Treasury Inspector General for Tax Administration, defined "employee" for separation incentive purposes, and provided for authority to provide separation incentive payments, additional contributions to the Retirement Fund, effect of subsequent employment with the Federal Government, and effect on agency employment levels.

Pub. L. 106–58, title I, §119, Sept. 29, 1999, 113 Stat. 441 , authorized the Commissioner of the Financial Management Services of the Department of the Treasury, during the period from Oct. 1, 1999 through Jan. 31, 2000, to offer voluntary separation incentives in order to provide the necessary flexibility to carry out the closure of the Chicago Financial Center (CFC) in a manner which the Commissioner deemed most efficient, equitable to employees, and cost effective to the Government, defined "employee" for separation incentive purposes, and provided for an agency plan, authority to provide separation incentive payments, eligibility requirements, effect on subsequent employment with the Federal Government, contributions to the Retirement Fund, and reduction of agency employment levels.

Pub. L. 106–58, title IV, §411, Sept. 29, 1999, 113 Stat. 456 , as amended by Pub. L. 106–554, §1(a)(3) [title IV, §408], Dec. 21, 2000, 114 Stat. 2763 , 2763A-146, authorized the Administrator of General Services, during the period Oct. 1, 1999 through Apr. 30, 2002, to offer a voluntary separation incentive in order to provide the necessary flexibility to carry out the closing of the Federal Supply Service distribution centers, forward supply points, and associated programs in a manner which the Administrator deemed most efficient, equitable to all employees, and cost effective for the Government, defined "employee" for separation incentive purposes, and provided for agency strategic plan, authority to provide incentive payments, eligibility requirements, effect of subsequent employment with the Federal Government, contributions to the Retirement Fund, and reduction of agency employment levels.

Pub. L. 105–206, title I, §1202, July 22, 1998, 112 Stat. 719 , authorized Commissioner of Internal Revenue to pay voluntary separation incentive payments to any qualifying employee of the Internal Revenue Service who voluntarily separated (whether by retirement or resignation) before Jan. 1, 2003, provided for pertinent definitions, additional Internal Revenue Service contributions to the Retirement Fund, effect of subsequent employment with the Government, and effect on Internal Revenue Service employment levels.

Pub. L. 104–208, div. A, title I, §101(e) [title V, §520], Sept. 30, 1996, 110 Stat. 3009–233 , 3009-272, as amended by Pub. L. 105–78, title V, §517, Nov. 13, 1997, 111 Stat. 1519 ; Pub. L. 106–113, div. B, §1000(a)(4) [title V, §515], Nov. 29, 1999, 113 Stat. 1535 , 1501A-276, authorized Railroad Retirement Board and Office of Inspector General of Railroad Retirement Board to provide voluntary separation incentive payments to any qualifying employee who voluntarily separated (whether by retirement or resignation) before Mar. 31, 2000, directed the Railroad Retirement Board, prior to obligating any resources for voluntary separation incentive payments, to submit to Congress a strategic plan outlining intended use of such incentive payments and a proposed organizational chart for agency once such incentive payments have been completed, and further provided for pertinent definitions, additional contributions to the Retirement Fund, effect of subsequent employment with the Government, reduction of agency employment levels, and that program would take effect Oct. 1, 1996.

Pub. L. 106–65, div. C, title XXXI, §3161, Oct. 5, 1999, 113 Stat. 942 , provided that notwithstanding section 101(f) [title VI, §663(c)(2)(D)] of Public Law 104–208, set out below, Department of Energy could pay voluntary separation incentive payments under such section 663 to qualifying employees who voluntarily separated (whether by retirement or resignation) before Jan. 1, 2003, and that not later than Mar. 15, 2000, Secretary of Energy was to submit to Director of Office of Personnel Management and Congress a report describing how the Department has paid voluntary separation payments under such section 663.

Pub. L. 105–261, div. C, title XXXI, §3156, Oct. 17, 1998, 112 Stat. 2257 , provided that notwithstanding section 101(f) [title VI, §663(c)(2)(D)] of Public Law 104–208, set out below, Department of Energy could pay voluntary separation incentive payments to qualifying employees who voluntarily separated (whether by retirement or resignation) before Jan. 1, 2001.

Pub. L. 104–208, div. A, title I, §101(f) [title VI, §663], Sept. 30, 1996, 110 Stat. 3009–314 , 3009-383, authorized any Executive agency other than Executive agency previously authorized to provide voluntary separation incentive payments during all, or any part of, fiscal year 1997, to provide voluntary separation incentive payments to any qualifying employee who voluntarily separated (whether by retirement or resignation) before Dec. 31, 1997, only to extent necessary to eliminate positions and functions identified by strategic plan to be submitted to Congress outlining intended use of such incentive payments and proposed organizational chart for agency once such incentive payments have been completed, and further provided for amount and treatment of payments, definitions, additional agency contributions to the Retirement Fund, effect of subsequent employment with Government, reduction of agency employment levels, and that program would take effect Oct. 1, 1996.

Pub. L. 104–205, title III, §349, Sept. 30, 1996, 110 Stat. 2976 , authorized certain agencies of Department of Transportation to provide voluntary separation incentive payments to any qualifying employee, provided that no amount would be payable based on any separation occurring before Sept. 30, 1996, or after Sept. 30, 1997, directed agencies to submit to Congress a strategic plan outlining intended use of such incentive payments and proposed organization chart for agency once such incentive payments have been completed, and further provided for definitions, additional agency contributions to the Retirement Fund, effect of subsequent employment with the Government, reductions of agency employment levels, and that program would take effect Oct. 1, 1996.

Pub. L. 104–204, title IV, §432, Sept. 26, 1996, 110 Stat. 2931 , as amended by Pub. L. 106–377, §1(a)(1) [title IV, §428], Oct. 27, 2000, 114 Stat. 1441 , 1441A-56, known as the "National Aeronautics and Space Administration Federal Employment Reduction Assistance Act of 1996", authorized the Administrator of the National Aeronautics and Space Administration (NASA), in order to avoid or minimize the need for involuntary separations due to a reduction in force, installation closure, reorganization, transfer of function, or other similar action affecting NASA, to establish a program under which voluntary separation pay, subject to the availability of appropriated funds, be offered to encourage eligible employees to separate from service by retirement or resignation up to Sept. 30, 2002, defined terms, provided for effect of subsequent employment with the Federal Government, required additional agency contributions to the Retirement Fund, reduced agency employment levels, and required an annual report on the program to be submitted to the Office of Personnel Management.

Pub. L. 104–190, §1, Aug. 20, 1996, 110 Stat. 1932 , authorized Agency for International Development to provide voluntary separation incentive payments to not more than 100 qualified employees of such agency who voluntarily separated (whether by retirement or resignation) before Feb. 1, 1997, and only to extent necessary to eliminate positions and functions identified by strategic plan to be submitted to Congress outlining intended use of such incentive payments and proposed organizational chart for agency once such incentive payments have been completed, and further provided for definitions, amount and treatment of payments, additional agency contributions to the Retirement Fund, effect of subsequent employment with the Government, and reduction of agency employment levels.

Pub. L. 104–180, title VII, §735, Aug. 6, 1996, 110 Stat. 1604 , authorized Department of Agriculture to provide voluntary separation incentive payments to qualified employees to extent necessary to eliminate positions and functions identified by strategic plan to be submitted to Congress outlining intended use of such incentive payments and proposed organizational chart for agency once such incentive payments have been completed, provided that no amount would be payable based on any separation occurring before Aug. 6, 1996, or after Sept. 30, 2000, and further provided for definitions, amount and treatment of payments, additional agency contributions to the Retirement Fund, effect of subsequent employment with the Government, reduction of agency employment levels, and that program would take effect Oct. 1, 1996.

Pub. L. 104–134, title I, §101(c) [title III, §339], Apr. 26, 1996, 110 Stat. 1321–156 , 1321-210; renumbered title I, Pub. L. 104–140, §1(a), May 2, 1996, 110 Stat. 1327 , provided that, in order to avoid or minimize need for involuntary separations due to reduction in force, reorganization, transfer of function, or other similar action, Secretary of the Smithsonian Institution could pay, or authorize payment of, voluntary separation incentive payments to Smithsonian Institution employees who separated from Federal service voluntarily through Oct. 1, 1996 (whether by retirement or resignation).

Pub. L. 104–19, title I, §702, July 27, 1995, 109 Stat. 221 , provided that General Accounting Office could for such employees as it deemed appropriate authorize payment to employees who voluntarily separated before Oct. 1, 1995, whether by retirement or resignation, which payment would be paid in accordance with provisions of subsection (d) of this section.

Section 3 of Pub. L. 103–226 authorized Executive agencies (other than Department of Defense, Central Intelligence Agency, or General Accounting Office) to provide voluntary separation incentive payments to qualified employees of such agencies in order to avoid or minimize need for involuntary separations due to reduction in force, reorganization, transfer of function, or other similar action, provided that in order to receive incentive payment, employee must have separated from service with agency (whether by retirement or resignation) before Apr. 1, 1995, or, under certain circumstances, not later than Mar. 31, 1997, and further provided for definitions, amount and treatment of payments, effect of subsequent employment with the Government, regulations, and authority for Director of Administrative Office of the United States Courts to establish similar program for individuals serving in the judicial branch.

Monitoring and Report Relating to Voluntary Separation Incentive Payments

Section 6 of Pub. L. 103–226 provided that: "No later than December 31st of each fiscal year, the Office of Personnel Management shall submit to the Committee on Governmental Affairs of the Senate and the Committee on Post Office and Civil Service of the House of Representatives a report which, with respect to the preceding fiscal year, shall include-

"(1) the number of employees who received a voluntary separation incentive payment under section 3 [set out above] during such preceding fiscal year;

"(2) the agency from which each such employee separated;

"(3) at the time of separation from service by each such employee-

"(A) such employee's grade or pay level; and

"(B) the geographic location of such employee's official duty station, by region, State, and city (or foreign nation, if applicable); and

"(4)(A) the number of waivers made (in the repayment upon subsequent employment) by each agency or other authority under section 3 [set out above] or the amendments made by section 8 [amending this section and provisions set out as a note under section 403–4 of Title 50, War and National Defense]; and

"(B) the title and the grade or pay level of the position filled by the employee to whom such waiver applied."

[Committee on Post Office and Civil Service of House of Representatives abolished by House Resolution No. 6, One Hundred Fourth Congress, Jan. 4, 1995. References to Committee on Post Office and Civil Service treated as referring to Committee on Government Reform and Oversight, see section 1(b) of Pub. L. 104–14, set out as a note preceding section 21 of Title 2, The Congress. Committee on Government Reform and Oversight of House of Representatives changed to Committee on Government Reform of House of Representatives by House Resolution No. 5, One Hundred Sixth Congress, Jan. 6, 1999.]

Source of Payments

Section 4436(b)(1) of Pub. L. 102–484 provided that: "For fiscal years after fiscal year 1993, separation pay shall be paid by an agency out of any funds or appropriations available for salaries and expenses of such agency."

Report

Section 4436(c) of Pub. L. 102–484 provided that: "At the end of each of fiscal years 1993 through 1998, the Secretary of Defense shall submit to the President, the Congress, and the Director of the Office of Personnel Management a report on the effectiveness and costs of carrying out the amendments made by this section [enacting this section]."

Section Referred to in Other Sections

This section is referred to in title 10 section 1598.