Benefits, Wage and NAF: Advise and Consult

The Benefits, Wage and NAF Policy Line of Business provides strategic, technical advice and guidance regarding the development and administration of policies and programs within our broad portfolio. The assistance we provide our customers ensures compliance with Federal regulations and DoD policy in support of the Department’s mission.

Benefits and Work Life Program

Designed to describe Federal employee benefits Our Benefits Employee Guides are great explainers about some of the most important Federal employee benefits.

Our BENEFACTS Newsletter provides quarterly updates on Federal Benefits and Entitlements, as well relevant information about various Injury and Unemployment Compensation, Wage and Salary and NAF policy topics. Our benefits advisors have the tools, resources, and acumen to help answer your questions about DoD health and well-being programs, telework, retirement options and all of the related employee benefits programs within our broad portfolio.

Our End of Year Report is a comprehensive overview of what our Line of Business has accomplished throughout the calendar year to fulfill our mission to support the “whole person – whole career” model for each and every DoD employee.

Injury Compensation and Unemployment Compensation (ICUC)

Managing civilian Injury Compensation and Unemployment Compensation (ICUC) programs can be a challenge to HR organizations. ICUC, a part of the Benefits, Wage and NAF Policy Line of Business, has expert advisors who provide proven online training, support, and solutions to help reduce compensation costs and meet your HR requirements. In addition, ICUC will assist all DoD agencies with advice and guidance regarding the Privacy Act to ensure confidentiality is maintained. ICUC is available to assist in facilitating your electronic communication and personally identifiable information challenges to ensure you meet theUser Access Guidelines . ICUC provides formal liaison services to help open communications and foster a strong working relationship between DoD and the OWCP office. Liaison Services include technical assistance, training, case reviews, reemployment assistance, home visit projects, bill resolution, chargeback code corrections, and primary emergency/disaster points of contact. Click here for Liaison Offices contact information.

NAF Policy provides clarification and interpretation of laws and government-wide regulations, and consulting services in the strategic design and analysis of NAF employment, NAF compensation, NAF Performance Management, NAF Classification, Wage and Salary, benefits, work life, workforce restructuring and transition programs for more than 120,000 civilian NAF employees. NAF Programs support healthy communities, “BeFIT” families, and troop readiness. NAF Programs keep families together and are tip of the spear because NAF employees are often military family members serving other military families. DoD Component NAF employers include the Department of the Navy (Navy Exchange Service Command (NEXCOM); Commander, Navy Installations Command (CNIC); and Marine Corps), the Department of the Army, the Department of the Air Force, and the Army and Air Force Exchange Service (AAFES) and several DoD Agencies. The NAF workforce is paid entirely from self-generated funds rather than taxpayer funds appropriated by Congress.

Portability of Benefits for Moves between Civil Service and NAF

Enacted in 1990, the Portability of Benefits for NAF Employees Act, P.L. 101-508, provides portability of pay and benefits for employees moving between NAF and APF positions within DoD. Under the Portability Act, employees who move with a break in service of no more than three days between DoD NAF and DoD APF civil service positions may be eligible for pay, leave, reduction-in-force, and retirement benefit protection.

Section 1043 of Public Law 104-106, enacted in 1996, expands the authorities provided by the Portability Act, primarily in the area of retirement coverage elections. Section 1131 of the National Defense Authorization Act for Fiscal Year 2002, Public Law 107-107, further expands the retirement election opportunity to make it easier for employees to continue retirement coverage after moving between NAF and APF civil service positions.

The Portability of Benefits Reference Guide provides a summary of various portability of benefits laws and regulations applicable to moves between APF civil service and NAF employment systems. This 2017 update reorganizes content, refreshes and expands guidance, and brings up to date references and points of contacts.

NAF employees moving under the DoD-OPM Interchange Agreement receive competitive status and are entitled to the same benefits and privileges provided by the Civil Service rules and by OPM regulations and instructions. In addition, if the employee moves without a break in service of no more than three days, the employee is entitled to portability of benefits.

Use the MOU-Merged Records Personnel Folder to retain the records of employees who qualify for portability of benefits, as well as electronic official personnel folders.

Bargaining Nonappropriated Fund Issues

NAF Employment

NAF employees are Federal employees, but excluded from most laws administered by OPM (title 5, U.S.C., Section 2105(c)). Unless specifically provided by law, NAF employment is not subject to civil service provisions or restrictions. The Secretary of Defense has administrative authority for most functional areas of the NAF personnel system. NAF white-collar pay, employee benefits, performance pay, and employee grievances are among the personnel functions regulated by DoD, not OPM.

DoD-OPM Interchange Agreement - DoD and OPM have an interchange agreement permitting employees to move between DoD NAF positions and civil service positions. Employees appointed under this agreement receive credit for previous service toward career tenure requirements and do not have to serve a new probationary period in the gaining employment system. Under this agreement, NAF employees receive consideration for competitive civil service appointments in the same manner as competitive service employees receive consideration for transfer to NAF positions. Employees in the competitive service receive consideration for appointment to any NAF position based on their qualifications. Appointments under the DoD/OPM Interchange Agreement require that the individual be sitting in a NAF position without time limit or been involuntarily separated from such appointment without personal cause within the preceding year, and have one year of "continuous service" to be appointed under the terms of the agreement. There is no requirement for the one year to have been served immediately preceding the move.

Employment Preferences specific to NAF

Spouse preference applies to jobs graded at NF-3 and below, and for positions paid at hourly rates. Preference applies to any job that is open to competition in accordance with merit staffing practices. Spouse preference can be used once for each permanent relocation of the military sponsor, or in surrounding localities to which a spouse is willing to travel on a daily basis. Preference applies for each permanent move until such a time the spouse:

  • accepts or declines a continuing position without time limits;
  • fails to maintain eligibility;
  • is no longer eligible for appointment in accordance with the pertinent authority; or
  • is no longer interested in being referred.
The spouse must be married to the military sponsor before reporting at the new duty station. Spouses may apply for preference as early as 30 days before the active duty spouse’s reporting date. Spouse preference is not applicable for a permanent move that is in conjunction with the retirement or separation of the military member.

Reemployment Priority Lists (RPL) is available to NAF employees separated by Business Based Action. Separated employees shall have priority placement in the NAF activity from which separated and priority consideration rights at other NAF activities in the same commuting area. Separated employees can remain on the RPL until reemployed, but no longer than one year from the date of their separation. Selection of an individual from the RPL is a noncompetitive recruitment action.

Veterans Preference hiring laws do not apply to NAF employment.

Suitability - As a condition of employment, all applicants and employees must undergo a background investigation that meets their position’s designated risk or sensitivity level. It is also important to ensure that all individuals who work for, or on behalf of, DoD are loyal, trustworthy, and of good character. Upon review of the Suitability Guide for Employees, individuals should be able to understand the criteria used to determine suitability and fitness, the process involved, and the steps that follow a suitability determination on their employment.

Suitability Guide for Employees
Suitability Guide for Supervisors
Suitability Reinvestigation Reference Guide

Selective Service - Any individual who was or was not required to register with Selective Service and knowingly and willfully did not register before the requirement terminated or became applicable to the individual, will not be appointed.

Useful links and additional guidance:

Office of Personnel Management Position Designation Tool

Perspective employees may apply for NAF positions at the following websites:

NAF Component Website
Air Force Services
Army and Air Force Exchange Service
Army, Morale, Welfare and Recreation
Navy Exchange Service Command
CNIC, Morale, Welfare and Recreation
Marine Corps Community Services

NAF Compensation

NAF Compensation covers pay policy for White-collar, Crafts and Trades, and Child and Youth employees. A pay-band system covers NAF employees working in white-collar (non-Crafts & Trades) positions. There are six pay-bands, NF-1 through NF-6 (GS-1 through SES equivalent), that cover the majority of NAF white-collar jobs. Child and Youth employees have a separate pay-band structure, CY-I and CY-II, (GS-2 through GS-5 equivalent). The minimum and maximum pay rates for CY-I and CY-II pay-bands link to GS-2 through GS-5 pay rates.

Local prevailing wage rates establish the pay rates for DoD Crafts & Trades positions.

DoD Instruction 1400.25, Volume 1407, “Nonappropriated Fund (NAF) Classification, July 6, 2012”, Table 1 in Enclosure 1 to Appendix 3 provides NAF employment system information regarding civil service grade equivalencies.

Additional guidance and information specific to NAF Compensation:

NAF Workers’ Compensation

The Nonappropriated Fund Instrumentalities Act (NAFIA) 5 U.S.C. sections 8171 et seq. (1952) extends the provisions of the Longshore and Harbor Workers’ Compensation Act (LHWCA) to certain civilian employees of nonappropriated fund instrumentalities of the Armed Forces. Congress enacted the NAFIA in 1952 to define the status of employees working for NAF at U.S. military bases in the United States and overseas. Funds appropriated by Congress do not pay NAF employees therefore; they are not entitled to coverage under the Federal Employees Compensation Act (FECA).

NAF Workers’ Compensation programs self-insure, self-administer, and are regulated by the Department of Labor. NAF employees who are currently receiving benefits under the LHWCA, or who are injured at work, should contact their local NAF HR Office.

For information about the Longshore and Harbor Workers’ Compensation visit:

Longshore and Harbor Workers’ Compensation

Find Department of Labor LHWC forms here:

Longshore and Harbor Workers’ Compensation Forms

DCPAS Furlough Guidance - A furlough places employees in a temporary nonduty, non-pay status because of lack of work or funds, or other non-disciplinary reasons. A shutdown furlough occurs when there is a lapse in annual appropriations. Shutdown furloughs can occur at the beginning of a fiscal year, if funds are not appropriated for that year, or upon the expiration of a continuing resolution, if a new continuing resolution or appropriations law is not passed.

Prudent management requires that we prepare for all contingencies, including the possibility that a lapse could occur. A lapse means a number of government activities cease due to a lack of appropriated funding, and that a number of employees would be temporarily furloughed. The resources below provide guidance to DoD Components in preparation for a furlough. For specific information or assistance, employees are encouraged to contact their local HR office.

For further information:

The Office of Personnel Management human resources furlough guidance.
ShutdownFurloughFAQ's Shutdown Furlough FAQs

Reference Guide - Implementation Procedures Guide
Status of Agency Operations (8 February 2018)
Apportionment of Obligational Authority for Necessary Agency Operations in the Absence of FY 18 Appropriations (8 February 2018)
DepSecDef Memo, Potential for Lapse in Funding (8 February 2018)
DepSecDef Memo, Guidance for Continuation of Operations During a Lapse in Appropriations (8 February 2018)
Apportionment of Obligational Authority for Necessary Agency Operations in the Absence of FY 18 Appropriations (20 January 2018)
Guidance on the Government Shutdown (19 January 2018)
DepSecDef Memo, Potential for Lapse in Funding (January 18, 2018)
DepSecDef Memo, Guidance for Continuation of Operations during a Lapse in Appropriations (January 18, 2018)
Example of Furlough Notice for Civilian Employees
Example of Furlough Notice for NAF Employees

Component Web Sites

Department of the Army
Department of the Navy/Marine Corps
Department of Air Force
Defense Finance & Accounting Service
Defense Logistics Agency
Under Secretary of Defense (Intelligence)
Office of the Secretary of Defense/JCS/Other DOD Agencies

Guidance for DOD Civilians Applying for Unemployment Compensation

Map of State Unemployment Insurance Web sitesCAC Enabled
Unemployment Instructions for Federal agencies
SF-8 for Army civilian personnel
SF-8 for Navy civilian personnel
SF-8 for Air Force civilian personnel SF-8 for DOD agency civilian personnel
SF-8 for DFAS civilian personnel
SF-8 for DLA civilian personnel
SF-8 for National Guard civilian personnel

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