# OPM Clarifies Retention Incentives During Military LWOP

The Office of Personnel Management (OPM) has clarified how retention incentives for federal employees who are military reservists are affected during periods of active-duty military leave without pay (LWOP). According to OPM regulations under 5 CFR Part 575 and protections afforded by the Uniformed Services Employment and Reemployment Rights Act (USERRA), retention incentives typically pause during unpaid military LWOP but may continue on a pro-rata basis during paid leave periods. Agencies cannot penalize employees or cancel retention agreements solely due to military service, but payout schedules are paused during active-duty LWOP. This guidance is critical for federal HR professionals and contractors managing workforce incentives and compliance for reservists on active duty.

- **Why this matters:** Procurement and HR professionals should ensure retention incentive policies align with OPM and USERRA rules to avoid compliance risks and support reservist employees effectively.
- Agencies must review and possibly adjust retention incentive agreements to reflect pauses during unpaid military LWOP.
- Contractors providing HR or workforce management services should incorporate these regulatory nuances when advising federal clients or structuring incentive programs.
- Understanding these rules helps maintain workforce stability and supports reservists without risking contractual or regulatory violations.

**Jurisdictions:** federal
**Industries:** Professional Services
**Topics:** Regulatory Compliance
**Published:** September 22, 2026

### Government Entities
- Office of Personnel Management (OPM)

### Key Quotes
> Under OPM guidelines (5 CFR Part 575) Call to Active Duty: Entering active military service is an authorized absence under USERRA. An agency cannot penalize you or cancel your overall agreement because you performed military service, but they will pause the payout schedule.
> — Original poster

### Sources
- [Retention Incentive while on Military LWOP](https://www.reddit.com/r/FedEmployees/comments/1wmv1ep/retention_incentive_while_on_military_lwop) - reddit-fedemployees