Uncle Sam Loosens Purse Strings: Bigger Bonuses, Fewer Forms for Fed Hires
Published Date: 12/15/2025
Rule
Summary
Starting February 13, 2026, federal agencies can approve bigger bonuses to attract and move new employees without asking for extra permission. They also get more freedom to decide how long new hires must stay after getting these bonuses—anywhere from less than 6 months up to 4 years. This change helps agencies hire faster and smarter, with clearer rules and fairer language.
Analyzed Economic Effects
5 provisions identified: 4 benefits, 1 costs, 0 mixed.
Agencies Can Approve Bigger Hiring Bonuses
Starting February 13, 2026, federal agencies can approve waivers that let them offer recruitment or relocation incentives up to 50 percent of an employee's annual basic pay multiplied by the number of years in a service agreement (not to exceed 100 percent of annual basic pay) without asking OPM for prior approval. Agencies must base a waiver on a described "critical agency need" and document why the competencies are critical to an important mission, project, or initiative.
Employees May Owe Repayment If They Leave Early
If you receive a recruitment or relocation incentive and resign before completing the required service period, you must repay any incentive amount that exceeds the portion attributable to completed service, unless an authorized agency official waives the repayment requirement. If the agency terminates the service agreement for management needs, you keep payments for completed service and retain any portion attributable to uncompleted service.
Group-Based Waivers Now Permitted
The rule amends 5 CFR 575.109(c)(1) to allow an agency to waive the normal recruitment incentive payment limitation for a group of employees (for example, similar occupational series) based on documented critical agency need. Agencies must review group determinations at least annually.
Shorter Recruitment Service Agreements Allowed
As of February 13, 2026, agencies may set recruitment incentive service agreements shorter than 6 months and up to 4 years. For example, an agency may authorize a recruitment incentive for a summer intern with a 3-month service agreement.
Agencies Can Pre-Authorize Incentive Offers
Agencies may designate officials (not lower than a candidate's supervisor) who can timely offer a recruitment incentive to a candidate without higher-level approval within a pre-established range. For example, an agency could permit such an official to offer up to 10 percent of pay without further review, if set in the agency plan.
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Key Dates
Department and Agencies
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