Agencies Instructed to Limit Employee Bonuses in 2014

By on November 7, 2013 in Current Events, Pay & Benefits with 24 Comments

The Office of Personnel Management and the Office of Management and Budget are instructing agencies to limit the amounts paid to federal employees for bonuses in FY 2014.

The guidance comes from a recent memo issued by OMB director Sylvia Burwell and acting OPM director Elaine Kaplan. The memo instructs agencies to limit bonuses for SES employees and professional (SLIST) employees to no more than 5% of annual aggregate salaries. Agencies must also limit award spending to no more than one percent of total aggregate salaries for non-SES/SLIST performance awards plus individual contribution awards (e.g., special act, or spot) for all employees.

The memo also states that spending levels for either category of awards cannot be higher than that paid in FY 2012. This is consistent with that issued for FY 2011 and FY 2012. Last year, when sequestration was triggered, agencies were directed to cancel almost all bonuses.

“Given the current fiscal environment and the budget constraints agencies will operate under in FY 2014, it is critical that agencies’ use of performance awards be managed in a manner that is cost-effective and leads to increased employee performance and organizational results,” the agency chiefs said in their memo.

The budgetary limits dictated by the memo apply to individual monetary awards only and do not apply to political appointees.

Additional details are provided in the full memorandum.

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Ian Smith is one of the co-founders of FedSmith.com. He enjoys writing about current topics that affect the federal workforce. Ian also has a background in web development and does the technical work for the FedSmith.com web site and its sibling sites.

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