The Office of Personnel Management is updating the 3Rs of human resources — relocation, retention and recruitment.

In a final rule issued in Wednesday’s Federal Register, OPM is requiring federal employees to establish residence in their new geographic area in order to receive relocation benefits. But the final rule stated that agencies must “define what constitutes the ‘new geographic area’ in relocation incentive service agreements.”

Additionally, OPM’s final rule addresses retention bonuses. It focuses on succession planning for senior leaders, in that the department considers the “availability of the potential sources of employees that are identified in the agency’s succession plan before authorizing a retention incentive.”

Finally, OPM wants agencies to at least annually review decisions in an effort to authorize recruitment incentives for specific positions that are considered difficult to fill. OPM wants a senior agency official to determine in writing if these positions remain difficult to fill year after year, and if not, end the incentive payment.

“An agency must define a targeted category of positions using factors that relate to the conditions described in the Code of Federal Regulations Sec. 575.106(b),” the final rule stated. “Factors that may be appropriate include the following: occupational series, grade level, distinctive job duties, unique competencies required for the positions and geographic location.”

OPM also added a waiver process to the regulations. An authorized agency official may request that OPM waive the 25 percent payment limitation for a group of employees or an individual employee based on a critical agency need.

“Under such a waiver, the total amount of recruitment incentive payments paid to an employee in a service period may not exceed 50 percent of the employee’s annual rate of basic pay at the beginning of the service period, multiplied by the number of years (including fractions of a year) in the service period,” the rule stated. “However, in no event may a waiver provide total recruitment incentive payments exceeding 100 percent of the employee’s annual rate of basic pay at the beginning of the service period.”

The majority of the comments on the proposed rule were related to relocation incentives. In all, OPM received 10 comments from individuals and agencies.

OPM said that because of the interest in relocation incentives, it will provide further guidance on the issue of maintaining a residence outside of the new regulations.

This new rule will be effective as of Sept. 13.

The final rule comes as the White House is asking that agencies limit the spending of bonuses across the 3Rs.

OPM issued a report in August 2011 that found agencies spent nearly $350 million in fiscal 2009 on recruitment, relocation and retention bonuses — with the largest share going to medical workers, engineers and patent examiners.

In light of budget cuts and sequestration, OPM and the Office of Management and Budget instructed agencies in June 2011 to cap payments for the 3Rs at 2010 levels.

OMB updated the guidance in April with a new memo. It stated that these monetary incentives “should be used only on a highly limited basis and in circumstances where they are necessary and critical to maintaining the agency’s mission.”

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