Time-off
Awards FAQs
Awards regulations allow agencies to grant time off
without charge to leave or loss of pay as an award to
recognize performance. Some frequently asked questions
about time-off awards include:
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Are
there any limits to the number of hours that can
be granted as a time-off award? |
| There are no Governmentwide
limits on granting time-off awards. However,
agencies are free to establish their own
guidelines and limitations on how much time off
is appropriate for various employee
contributions, as well as overall periodic limits
that may be useful for preserving the integrity
of their time-off award program and preventing
abuse and/or criticism. |
 
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What
regulatory limitations apply to time-off awards? |
| The regulations
provide that time-off awards shall not be
converted to cash. Agencies will document a
time-off award, as well as cash awards, in
compliance with the OPM operating manual, Guide
to Processing Personnel Actions, and they
must submit time-off award, as well as cash
award, data to the Central Personnel Data File in
compliance with the Office of Personnel
Management operating manual, Guide to the Central Personnel Data File. |
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Why
does the Office of Personnel Management prohibit
converting time-off awards to cash? |
| The
"currency" of a time-off award is time,
not money. A method for conversion would have to
be developed. The obvious, apparently
straightforward solution is to convert time to
cash using an hourly rate of pay. However,
lower-graded employees may well find such
salary-based conversion unfair. If a mixed-grade
group of employees were granted equal time-off
awards (which is a common practice), they would
convert to cash very unequally. In addition,
several administrative issues are involved. For
instance, the administrative problems associated
with "withdrawing" a reported time-off
award and "substituting" a cash award
would also wreak havoc on the integrity of agency
and Office of Personnel Management reports of
award use. Although administrative concerns ought
not to drive sensible policy choices, they are
serious enough in this instance to leave the
prohibition on conversion in place. |
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Can
an agency offer an employee the choice of
time-off or a cash award? |
| Technically, there
is no legal bar to offering that choice. However,
the Office of Personnel Management strongly
recommends that agencies not offer such a
choice. To do so would put the employee who opts
for time-off in "constructive receipt,"
for tax withholding purposes, of the cash award
offered. Appropriate withholding based on the
cash award offered would have to be done at
the time the choice is offered (i.e., when
the employee reasonably would be expected to
receive the cash), rather than based on the pay
associated with the time off when the time off is
actually taken. When offering the employee a
choice between time off or cash as an award, and
if the employee chooses the time off,
difficulties arise:
- it will be difficult to explain to the
employee the basis for the unexpected
additional tax withholding that occurs as
a result of the constructive receipt of
the cash award; and
- the administrative burden on the agency
may well be prohibitive because agencies
would be responsible when the choice of
award is offered for assuring that the
initial withholding based on the cash
award offered is made at that time. When
the time-off award is actually used, the
agency would be responsible for comparing
the amount already withheld for the cash
award offered and the amount that
otherwise would be due based on the pay
for the time off. No additional
withholding would be made if the tax due
for the time off is at least equal to the
tax already withheld for the cash
offered. If pay for the time off is
greater than the cash award offered, an
additional withholding is made on the
difference when the time-off award is
used.
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