The Office of Personnel Management gives federal employees financial awards and bonuses based on their performance. There are a wide variety of bonuses, not only in the form of financial awards but honorary awards, time-off awards,and informal recognition awards. Each of these awards are given to federal employees based on their performance.
While each award has its own perks, the financial awards and cash bonuses can be up to 20 percent of the employee’s salary. At a glance, a federal employee can get 10 percent of his or her salary in bonuses for their performance or up to 20 percent for exceptional performance. For financial awards and cash bonuses like this, the authority is under 5 U.S.C. 4302, 4503, 4505a; 5 CFR 451.104.
Other than this rate of financial awards and bonuses, the agencies have the ability to grant cash awards to employees or a group of workers. The awards are given in recognition of accomplishments that contribute to government operations. This can be for contributing to the economy, increasing the efficiency of that particular agency, or completing a certain task under an exceptionally short period of time.
As for the amount of these types of bonuses, it is good to know that agencies have a limit. At the time of writing, agencies can grant up to $10,000 in bonuses without any external approval whatsoever and up to $25,000 with OPM approval. For the awards in excess of $25,000, a Presidential approval is needed.
Increased Financial Awards and Bonuses in 2021
Recently, the White House proposed a 1% pay increase for federal workers for the FY 2021. This is very little compared to last year as it was about 3%. However, the White House also said there will be an increase in the financial awards and bonuses based on performance.
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Given the pay raise is only 1% but the availability of the financial awards is going to be increased, those who work harder can get way more than the 1% pay raise in 2021 overall. Keep in mind that the 1% pay increase only applies to the base pay. The locality payments are excluded.
This can be quite confusing but for instance—last year—President Trump issued an executive order for finalizing and dividing by locality the average 3.1% federal employee pay raise. This resulted in pay raises ranging from 2.85 to 3.52%. With that said, a similar pay raise may be made next year. If that were to happen, the pay raise could be a little bit higher than the initial 1%.