Agency layoff rules to get an overhaul under nearly finalized Trump administration proposal

The Office of Personnel Management is set to propose new regulations in the coming weeks seeking to significantly quicken the pace of agency reductions in force, though experts warn the changes could actually impede the Trump administration’s stated goals of boosting efficiency and merit.

A draft of the proposal was shared with agencies earlier this week; Government Executive reviewed excerpts of the plan. OPM officials were expected to brief agency human capital leaders on the initiative Thursday. The agency did not immediately respond to a request for comment.

The proposed rule draft, which will be subject to a 60-day public comment period once it has been published in the Federal Register, describes the current system for laying off federal employees as “outdated,” failing to keep pace with workplace trends.

“The current regulatory framework has been in place since the middle of the 20th century with few modifications since then,” OPM wrote. “The current rules have become cumbersome and inefficient. The proposed changes offer a more streamlined RIF structure that emphasizes performance over other factors in the downsizing process.”

The plan creates a new formula for determining which employees within a RIF are retained, based on the weighted sum of their three most recent performance appraisals–seven points for an “Outstanding” rating scaling down to one point for “Unacceptable.” This would replace the current system, which factors in the type of an employee’s appointment, their length of service, veterans’ preference and, given the lowest weight, recent performance.

“By prioritizing performance over length of service in a RIF the proposed rule aims to increase the likelihood that top or higher-level performers will be retained over employees with lower performance ratings or those who have merely been on the job for longer periods of time,” the draft states. “This proposed change will increase the impact of merit in the RIF process which currently prioritizes non-merit factors such as length of service and veterans’ preference.”

Michael Fallings, a partner at Tully Rinckey, a law firm that works primarily with federal employees, said upon reviewing the proposed rule draft that its goal was to make it “easier for the government to remove employees through the RIF process.” He speculated the Trump administration reviewed existing RIF regulations after stating its goal of drastically slashing the federal workforce and saw "how convoluted it is." 

Shortly after taking office, President Trump issued an executive order directing all agencies to engage in large-scale layoffs to cut their rolls. A handful of agencies have gone through that process to date, though most have instead relied on incentivized separations and natural attrition to slash their workforces. 

The proposed rule would also add a host of federal job types to the list of those excluded from RIF procedures, stripping them of the procedural protections baked into the layoff process. Currently, only members of the Senior Executive Service and political appointees are excluded; under OPM’s plan, so too would be law clerk trainees, positions in remote locations or otherwise represent a “critical hiring need,” unpaid positions, temporary professional, scientific or technical experts; doctors under contract or collecting fee-based compensation part-time jobs held by college professors, and fellows.

Additionally, OPM is proposing to make it easier to downgrade federal employees to lower-paying roles if their job duties have been “eroded” over time. Currently, doing so requires putting those employees through RIF procedures. The new rule would eliminate that requirement.

One former senior HR official told Government Executive that the new exclusions from RIF procedures, particularly the provision pulling erosion of duties outside of the process, will significantly cut down on agencies’ traditional RIF prep time of 12 to 18 months. But they warned that the new emphasis on recent performance appraisals could actually reduce the importance of merit in the process, particularly given the Trump administration’s espousal of forced distribution of ratings.

“There’s always a certain amount of subjectivity in performance appraisals, and I don’t even care if the manager is subjective in a positive or negative way,” they said. “Unless there are irrefutable, quantitative measures on their work output, there’s always going to be that human element. Every three to five years, everyone wants to take a fresh look at performance management–sometimes in the form of adding more ratings [to the scale], and sometimes it’s pass-fail–but it’s never done to anyone’s satisfaction.”

The changes, with their added subjectivity, could lead to more avenues for employees to challenge RIFs, which Fallings suggested could undermine the administration’s efficiency efforts. 

“This is probably going to result in quicker and more broad RIF actions,” he said, “but it could result in further litigation over the appeals.” 

The former official also expressed concerns that the sheer size and number of policy changes coming out of OPM will make it hard to track which reforms are effective and which are not. And questions remain how the administration will train its HR workforce on the new procedures.

“The administration cut all of these personal services contracts in an effort to save money, but a lot of those dollars were used on things like training and development, so they have not only changed the whole system of performance management, now there’s nobody to train the employees on it,” they said. “There’s not enough money to implement these plans, there’s a lack of contractor support. The perception from the people that I’ve talked to is that it’s almost as if the administration is intentionally destroying government, with no plans on how to rebuild it. They just want to point at it and say, ‘We told you it didn’t work.’”