Brace yourself, federal employees: ‘Reductions in force’ are coming

While Congress has yet to pass a budget, the Trump administration has drawn how it would like to see the federal government “reshaped,” and most anticipate that reductions in force (RIFs) will be a part of this shape shifting. Congress is supposed to pass a budget resolution by April 15, although it’s better known for passing continuing resolutions instead of meeting deadlines, and the budget at issue is for the fiscal year beginning on October 1. So, there is time before the RIF tsunami strikes, but like with any threatening forecast, preparation is key.

First and foremost, this is a good time to assess whether you want to stay in the government. From the RIFs that occurred in prior decades, we know that incentives for early retirement tend to be more cost effective than executing the demotions and terminations that come with RIFs, so it is expected that several agencies, especially those prominently featured on the chopping block like the EPA and the State Department, will obtain Voluntary Early Retirement Authorization (VERA).

{mosads}To be eligible for an early out, an employee must have 20 years of service and have reached the age of 50, or have 25 years of service regardless of age. Along with VERA, agencies typically also offer a buyout, officially called a Voluntary Separation Incentive Payment (VSIP), of $25,000, although DoD obtained authorization to offer $40,000. These lump sum payments are taxable, so plan accordingly if this route appeals to you.

If you lack sufficient service or are uninterested in retiring, then it’s time to step up your performance and make sure your performance appraisals are complete and in your file, as your placement on the retention register will control your likelihood of surviving any RIF. While most agencies consider performance after factors such as tenure and veterans preference (which you have no control over), at DoD, performance will now be the number one factor.

Given that many employees have performance periods that match up with the fiscal year, the appraisal issued in the upcoming fall based on your performance now and in the coming months may be used in the creation of the retention register. If your supervisor failed to issue appraisals to you for past periods, or you have an outstanding challenge to a rating, make sure you get those records corrected.

Unfortunately, because performance ratings are used to decide who stays and who goes, studies of past RIFs have demonstrated that women and minorities are targeted disproportionately.

In a 1983 report, the Merit Systems Protection Board (MSPB), which looked at the RIFs carried under Reagan, reported that 42 percent of the RIF related actions, including transfers, demotions, and terminations, involved women, although only 37 percent of the workforce was female, and 37 percent of all RIF related actions involved minorities, although only 23 percent of the work force was minority.

The impact on women and minorities was even greater when it looked only at separations — 51 percent of those fired were women, and 40 percent were minorities. Further, the MSPB reported “the majority (71 percent) of the senior personnel officials did not think that performance appraisals were accurate enough to be used for RIF purposes.”

Thirty-four years later, the government has done very little to improve its performance rating systems, yet this time around, performance ratings may be even more crucial.

Another issue to consider is whether you are open to relocating. As agencies shuffle work around during RIFs, they often decide to transfer a function to another division, possibly in another state, or even to another agency. Under the RIF regulations, the employee has the right to transfer with their functions, although this isn’t always feasible in the real world.

If your position is moved to outside of your commuting area, and you opt not to move with it, you would be eligible both for a discontinued service retirement, which would permit you to obtain an immediate annuity, and, when you reach your minimum retirement age, the special retirement supplement. You would also be entitled to continue your FEHB coverage into retirement.

In past RIFs, several employees have opted, when faced with separation, to voluntarily accept a demotion. The good news is that regulations allow for preservation of your pay for at least two years, despite your lower grade and perhaps less fulfilling work. In the worst case scenario, those whose positions are abolished and left with no option other than separation are also entitled to discontinue service retirement. If nothing else, this allows you some income and to keep your health insurance in place while you are seeking other employment.

Finally, know that because you work for the federal government, you won’t be called in one day and issued a pink slip without notice. Get involved in the discussions about the future of your office and stay engaged with your agency about your options.

If your agency fails to properly place you on the retention register and you are subjected to separation, or if the RIF is carried out in a discriminatory manner, e.g., older employees are specifically targeted, you may have appeal rights to either the MSPB or EEOC.

Debra D’Agostino is a a federal employment attorney and a founding partner of the Federal Practice Group, a firm specializing in the unique bodies of law created by the U.S. federal government.