§ 5597. Separation pay

§ 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—

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.

(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.

(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.)

Editorial Notes

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, 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).

Statutory Notes and Related Subsidiaries

Effective Date of 1996 Amendment

Pub. L. 104–201, div. A, title XVI, § 1612(b), Sept. 23, 1996, 110 Stat. 2739, 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, as amended by Pub. L. 107–107, div. A, title XI, § 1133(a), Dec. 28, 2001, 115 Stat. 1244, provided that: “The Secretary of Defense shall ensure that, in fiscal year 2002 not more than 2000 employees of the Department of Defense are, and in fiscal year 2003 not more than 6000 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: “(1) Voluntary separation incentive pay under section 5597 of title 5, United States Code. “(2) Immediate annuity under section 8336(o) or 8414(d) of such title.”

[Pub. L. 107–107, div. A, title XI, § 1133(b), Dec. 28, 2001, 115 Stat. 1244, provided that: “The amendments made by subsection (a) [amending [Pub. L. 106–398, § 1 [div. A], title XI, § 1153(b)], set out above] may be superceded by another provision of law that takes effect after the date of the enactment of this Act [Dec. 28, 2001], and before October 1, 2003, establishing a uniform system of providing voluntary separation incentives (including a system for requiring approval of plans by the Office of Management and Budget) for employees of the Federal Government.” ]

Voluntary Separation Incentives