Incentives and Benefits

Along with a salary, federal employees also receive incentive awards. These are one-time awards, ranging from $25 to $10,000, and are given for a significant suggestion, a special act or service, or sustained high job performance. Workers are also eligible for premium pay, which is granted when an employee has to put in overtime or work on holidays, weekends, at night, or under hazardous conditions.


In an effort to compete with private-sector jobs, some government agencies have adopted different pay systems. The two largest departments experimenting with new pay systems are the Departments of Defense and Homeland Security. Pay increases, under these new systems, are based on performance as opposed to length of service.

Benefits are also an important part of federal employee income. Federal employees can choose from numerous health plans and life insurance options, and the premium payments are partially offset by the government. New hires also participate in the Federal Employees Retirement System (FERS), which is a three-pronged retirement plan including Social Security, a pension plan, and an optional thrift savings plan. Participation in the thrift savings plan is voluntary, and contributions made are tax-deferred and matched by the federal government. Some federal agencies also provide public transit subsidies to encourage the use of public transportation.

Federal employees receive both vacation time and sick leave. They earn thirteen days of vacation leave a year for the first three years, twenty days a year for the next twelve years, and twenty-six days a year after fifteen years of service. They also receive thirteen days of sick leave a year, which may be accumulated indefinitely.

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