Last Updated: September 28, 2026 Reading Time: 10 min

In the AFGE v. OMB settlement, the defendant agencies represented that the RIF notices they issued during the October 1 to November 12, 2025 lapse were rescinded and the employees separated under them reinstated, and that State, GSA and SBA paid back pay. Court-ordered reversals of the 2025 workforce cuts keep producing reinstated employees too. If you were reinstated after a RIF, the paperwork you got back covers the appointment. It rarely covers the money. What your agency owes you after a corrected separation runs to eleven lines, and one of them is a TSP election to arrange before the award is paid, which the agency must offer you on reinstatement.

Quick Answers: What Reinstatement Owes You

I was reinstated after my RIF was rescinded. Am I automatically owed back pay?

Not automatically. The trigger is a corrected unjustified or unwarranted personnel action that cost you pay. 5 CFR 550.804 requires that the action "resulted in the withdrawal, reduction, or denial of all or part of the pay, allowances, and differentials otherwise due the employee." You do not need to win a case: a written administrative determination by the agency itself counts, which is what a rescinded RIF notice usually is.

Does back pay include locality pay and premiums, or just base salary?

Both. The statute covers "the pay, allowances, or differentials, as applicable which the employee normally would have earned or received during the period if the personnel action had not occurred." Locality pay, night and Sunday premium, availability pay and hazard differentials are inside the award, not add-ons you have to request.

I worked a private-sector job while I was out. How much does that cost me?

Only what you actually earned. The statute offsets "any amounts earned by the employee through other employment during that period," and the regulation excludes earnings from outside work you would have continued anyway and counts net earnings. There is no reduction for jobs you might have taken. Under 5 CFR 550.806(b) the offset is spread proportionally across every back-pay date before interest is computed, not subtracted at the end.

Do I get interest, and at what rate?

Yes, in nearly every case. The only exception is a complete back pay payment made within 30 days of the missed payment, with the accrual end date set equal to its start date (5 CFR 550.806(a)(2)). 5 U.S.C. 5596(b)(2) sets the rate at the rate "in effect under section 6621(a)(1) of the Internal Revenue Code," compounded daily. The regulation spells out the mechanics: "the agency shall compound interest by dividing the applicable interest rate (expressed as a decimal) by 365 (366 in a leap year)." The clock runs to a date no more than 30 days before you are paid.

I already got severance and a lump-sum annual leave payment. Do I have to give them back?

They come out of the award as erroneous payments; you were made whole for that period a different way. The sequencing helps you: "Interest shall be included in the amount from which deductions for erroneous payments are made," so interest is added first and the repayment is netted out of the larger figure.

What happens to the TSP contributions and agency match I missed?

Two tracks for FERS participants, under the back-pay rule at 5 CFR 1605.13 (CSRS participants receive no agency contributions). The agency automatic 1% contributions come regardless: "the employing agency must make all appropriate agency automatic (1%) contributions associated with the back pay award." Your own missed contributions depend on an election: "immediately upon reinstatement or retroactive appointment the employing agency must give the participant the opportunity to submit a contribution election," and any make-up contributions you elect "must be computed before the back pay award or other retroactive pay adjustment is paid, deducted from the back pay," and submitted with the attributable agency matching contributions. Breakage is posted by the TSP record keeper. If your separation is reversed with reinstatement and no break in service, you may restore a post-employment distribution other than an annuity under 1605.13(d); notify the TSP record keeper within 90 days of reinstatement to keep that option.

Does the separation period count toward my retirement?

Yes. 5 CFR 550.805(a) says the employee "shall be deemed to have performed service for the agency during the period covered by the corrective action." That sentence restores creditable service for FERS or CSRS, your within-grade waiting period and your leave accrual. Check your corrected SF-50 and your eOPF rather than assuming it happened.

My agency put me on administrative leave for months after reinstating me. Isn't that capped at 10 days?

Not in this situation. 5 U.S.C. 6329a(b) does cap administrative leave at 10 workdays a year, but OPM's rule narrows what counts. Under 5 CFR 630.1404(a), "place" means "a management-initiated action to put an employee in administrative leave status, with or without the employee's consent, for the purpose of conducting an investigation," and "The 10-workday annual limit does not apply to administrative leave for other purposes." What the rules do say is that administrative leave "is not an entitlement, but is an authority" and is "appropriately used for brief or short periods of time."

What about my health insurance during the gap?

FEHB enrollment ends "the last day of the pay period in which he/she is separated from the service," followed by the 31-day temporary extension of coverage under 5 CFR 890.401. OPM's FEHB Handbook contemplates enrollment "reinstated retroactive to the effective date of the termination" where someone is restored with full back pay, including a refund of premiums paid on a conversion contract and an adjustment for the benefits difference. Raise it in writing with your employing office the week you return.

How far back can back pay go?

5 CFR 550.804(e) limits it to a period beginning no more than 6 years before the date a timely appeal was filed, with a 2-year limit for Fair Labor Standards Act claims (3 years if willful). The filing date sets the ceiling, or the date of the administrative determination when no appeal was filed.

The Invoice: 11 Lines, Who Computes Each One, and the Deadline

No agency hands you this list. It is assembled from the Back Pay Act, OPM's back-pay regulations at 5 CFR part 550 subpart H, the TSP error-correction rules at 5 CFR part 1605 and the FEHB rules.

# What you're owed Authority Who computes it Timing or deadline
1 Base pay, locality pay, allowances and differentials you would have earned 5 U.S.C. 5596(b)(1)(A)(i) Agency payroll provider, from the corrected SF-50 After the corrected action processes
2 Minus qualifying net interim earnings, excluding pay from work you would have continued anyway 5 U.S.C. 5596(b)(1)(A)(i); 5 CFR 550.806(b) spreads them by ratio Agency, from documentation you supply Keep W-2s and pay stubs from interim work
3 Minus erroneous payments already received (severance, lump-sum leave, annuity, refunded retirement contributions), then the authorized deductions (retirement contributions, FICA and Medicare, health and life premiums, tax withholding) and any administrative offset for other federal debt 5 CFR 550.805(e) Agency, in the regulation's order Netted out after interest is added
4 Interest, compounded daily at the IRS overpayment rate 5 U.S.C. 5596(b)(2); 5 CFR 550.806(d)–(e) Agency; OPM publishes a back-pay interest calculator Runs to within 30 days of the payment date
5 Retirement service credit, step-increase waiting time and leave accrual for the gap 5 CFR 550.805(a), "deemed to have performed service" Agency HR via the corrected record; OPM at retirement Verify on your next SF-50 and in eOPF
6 Restored annual leave, including amounts above your ceiling placed in a separate account 5 CFR 550.805(g) Agency timekeeping Has its own use-or-lose deadline; get the expiration date in writing
7 For FERS participants, agency automatic 1% contributions (regardless of your election) and matching contributions attributable to your make-up election, with breakage; CSRS participants receive no agency contributions 5 CFR 1605.13(c) Agency submits; TSP record keeper computes breakage Posted with the contributions
8 TSP: your own missed contributions, by a make-up election the agency must offer on reinstatement; computed before the award is paid and deducted from it 5 CFR 1605.13(a), (c) You elect; agency deducts from the award Before the back pay award is paid
9 FEHB coverage continuity 5 CFR 890.304(a)(1)(i); OPM FEHB Handbook on retroactive reinstatement Employing office and carrier Raise it the week you return
10 Reasonable attorney fees, if awarded under the 5 U.S.C. 7701(g) standards 5 U.S.C. 5596(b)(1)(A)(ii) The forum that decided your case With or after the merits decision
11 The outer boundary 5 CFR 550.804(e): generally 6 years before a timely appeal, or before the administrative determination when no appeal was filed; FLSA claims 2 years, 3 if willful Your filing date, or the agency's determination date, sets it

Two items are deliberately not on the list. Sick-leave recredit is handled by your servicing HR office and should be confirmed in writing; the regulation's leave paragraph addresses annual leave. FEGLI restoration mechanics are not stated here because no primary rule was retrieved for this post; ask HR to confirm your life insurance was reinstated as of the separation date.

Reinstatement Is Not Rehiring

The Back Pay Act only pays when "an appropriate authority" finds you were affected by an unjustified or unwarranted personnel action and that action cost you pay. A rescinded RIF notice, an MSPB or OPM decision in your favor, a settlement or the agency's own written determination all qualify. A new appointment after a separation that was never corrected does not. If you were rehired into a new job after a 2025 separation, the rehiring post covers what that does and does not restore.

The same line separates this post from furlough back pay. Employees furloughed during a lapse are paid under a different statute, with no appeal predicate and no interest. The shutdown back pay mechanics post covers that track.

What Gets Subtracted, and in What Order

The gross award is everything you would have earned. Four things come off it, in the order the regulation sets: outside earnings, erroneous payments, the authorized deductions (retirement contributions, FICA and Medicare, health and life premiums, income tax withholding), and any administrative offset for other federal debt. Two of those need explanation.

Outside earnings come off first: net earnings from interim employment, excluding income from work you would have continued without the personnel action (550.805(e)(1)). Under 5 CFR 550.806(b), the agency reduces "the amount of pay, allowances, and differentials due for each date" by the ratio of your outside earnings to total back pay. Spread that way, the offset lowers the base that interest accrues on for every day of the period, which is why the interest figure lands below a back-of-envelope estimate.

Separately from that order, time you were not available is excluded from the covered period. The regulation excludes "any period during which an employee was not ready, willing, and able" to work because of incapacitating illness or injury, and any period during which you were unavailable for reasons unrelated to the personnel action; for qualifying illness or injury you may ask to have available sick or annual leave substituted.

Erroneous payments come off second: severance, a lump-sum annual leave payout, an annuity or a refund of retirement contributions. Interest is computed first, on the full net-of-earnings award, and then "Interest shall be included in the amount from which deductions for erroneous payments are made." You repay the severance out of a larger figure.

How the Interest Works

The rate is not negotiable and not chosen by the agency. It is "the annual percentage rate or rates established by the Secretary of the Treasury as the overpayment rate under section 6621(a)(1) of title 26," which changes quarterly. OPM publishes a back-pay interest calculator that carries the current rates; this post does not print a rate because it will be stale by the next quarter.

The compounding is daily. For each day, the agency divides the annual rate by 365 (366 in a leap year) and applies it to the running balance. Interest starts separately on each date you would have been paid, usually each missed pay date, and runs until "a time selected by the agency that is no more than 30 days before the date of the back pay interest payment." An agency that takes six months to cut the check generally pays about six more months of interest, up to the agency-selected end date.

The TSP Election Due Before the Award Is Paid

Back pay awards have their own TSP rule, 5 CFR 1605.13, and it works differently from an ordinary payroll error. Only the agency's automatic 1% is automatic, and only FERS participants receive agency contributions at all: "regardless of whether a participant elects to make up employee contributions, the employing agency must make all appropriate agency automatic (1%) contributions associated with the back pay award."

Your own contributions, and the agency match that rides on them, depend on an election you make at the front of the process. "Immediately upon reinstatement or retroactive appointment the employing agency must give the participant the opportunity to submit a contribution election to make current contributions," and for the missed period you may submit a new election or have the election you had on file when you separated reinstated. Whatever you elect "must be computed before the back pay award or other retroactive pay adjustment is paid, deducted from the back pay," submitted to the TSP record keeper with the attributable agency matching contributions, and kept inside the IRS annual limits for the years involved. Breakage, the earnings the money would have had if it had gone in on time, is calculated by the record keeper on the posting date.

The practical point: the election has to exist before the award is paid, because the contributions come out of the award. Make it the day you are reinstated, not after the check clears.

One more option applies if you took your TSP money out after the separation. Under 1605.13(d), if you received a post-employment distribution in any form other than an annuity and the separation is reversed with reinstatement and no break in service, you may restore the amount distributed. The right expires if you do not notify the TSP record keeper within 90 days of reinstatement. Restored funds buy shares at the price on the posting date and do not earn breakage, and a loan that had been declared a foreclosure can be reinstated along with them (1605.13(e)).

To see what the restored dollars are worth, use the TSP Calculator: after the restoration posts, enter your balance including the restored amount and your expected recurring annual contributions, and the projection shows the balance at retirement under conservative, moderate and aggressive return scenarios.

Months of Administrative Leave: What the Cap Actually Covers

One federal employee described being kept on administrative leave for months after a RIF reversal. The instinct is to reach for the 10-day cap in 5 U.S.C. 6329a(b), and the instinct is wrong.

OPM's rule at 5 CFR 630.1404(a) limits the cap to one scenario: "the term 'place' refers to a management-initiated action to put an employee in administrative leave status, with or without the employee's consent, for the purpose of conducting an investigation," and "The 10-workday annual limit does not apply to administrative leave for other purposes." After 10 days of investigation-related leave, the agency's next tool is investigative leave under a separate subpart.

What OPM's rules do say about non-investigative administrative leave is a principle rather than a limit. Under 630.1403, administrative leave "is not an entitlement, but is an authority, entrusted to the discretion of" the agency, and it "is appropriately used for brief or short periods of time," usually not more than one workday. Months on admin leave after reinstatement has to be justified under that principle, and the regulation lets an agency approve longer periods when appropriate. It is not a violation of the cap, and it is not something you can demand.

For the reader, the practical point is different. While you are on administrative leave you are in pay status without loss of pay, without charge to other leave and without loss of credit for time or service. That is a materially better position than separation, and the back-pay computation above is where the money question lives.

Health Insurance During the Gap

Your FEHB enrollment ended on the last day of the pay period in which you were separated, with the 31-day temporary extension of coverage after it. If you paid for coverage in between, OPM's FEHB Handbook contemplates that when someone is restored to duty with full back pay, the enrollment is "reinstated retroactive to the effective date of the termination," with a refund of premiums paid on a conversion contract and an adjustment for the difference in benefits. Claims from the gap are the reason to raise this in writing the week you return, before the carrier's own deadlines run.

If the Agency Gets a Line Wrong

Corrected personnel actions are computed by people working from the same regulations. Ask for the computation in writing, check the offset order and the interest end date against the rules above, and confirm that your TSP election was on file before the award was paid. If you won at the MSPB and the agency has not complied, the enforcement post covers the petition for enforcement. For the tax treatment of a lump-sum payment covering a prior year, the OPM back pay and taxes post covers the year-received rule for annuity arrears; ask a tax professional before you assume payroll back pay works the same way.

If your separation traces to last fall's shutdown, start with the settlement rights post, which covers what the agreement guarantees and the December deadlines.

Sanity-Check the Gross-to-Net

Use the free Federal Take-Home Pay Calculator to run your GS grade, step and locality and get the biweekly net for one pay period. Multiply by the number of pay periods in your separation window for an order-of-magnitude check on the gross-to-net of your back-pay statement. The calculator is GS schedule only, biweekly, on 2026 rates, and it does not apply the 5 CFR 550.805 offsets; it is a paycheck estimator, not a back-pay engine. Run your paycheck →

Sources

  • 5 U.S.C. 5596 (Back Pay Act): pay, allowances and differentials; offset of outside earnings; attorney fees; interest at the 26 U.S.C. 6621(a)(1) rate compounded daily.
  • 5 CFR 550.804–550.806: entitlement, administrative determinations, the 6-year ceiling (from the appeal or the administrative determination), "deemed to have performed service," unavailable periods and leave substitution, the four-stage offset order, interest included before erroneous-payment deductions, proportional offset of outside earnings (excluding work you would have continued anyway), daily compounding, the 30-day no-interest exception, interest end date; 5 CFR 890.401 (31-day extension of coverage).
  • 5 CFR 1605.13(a), (c): back pay awards; contribution election on reinstatement; make-up contributions computed before the award is paid and deducted from it; agency automatic 1% regardless; breakage. 1605.13(d), (e): restoration of a post-employment distribution after a reversed separation with no break in service (notify the record keeper within 90 days of reinstatement), no breakage; loan reinstatement.
  • 5 U.S.C. 6329a(b) and 5 CFR 630.1403–630.1404: the 10-workday administrative-leave cap and its limitation to investigative placements; administrative leave as an authority, not an entitlement.
  • 5 CFR 890.304(a)(1)(i) and the OPM FEHB Handbook: termination on separation; retroactive reinstatement on restoration with full back pay.
  • AFGE v. OMB settlement agreement, paragraph 1(b) and preamble paragraph 8, as read in the September 27, 2026 FedTools packet: 2025 shutdown RIF separations rescinded and reinstated; State, GSA and SBA paid back pay.