Proposed Rule2026-04377
Reduction in Force
Primary source
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Published
March 5, 2026
Issuing agencies
Personnel Management Office
Abstract
The Office of Personnel Management (OPM) is issuing a proposed rule to revise its reduction-in-force (RIF) regulations. The proposed rule would make the RIF regulations more streamlined, efficient, and merit-based by prioritizing performance over tenure and length of service when determining which employees will be retained in a RIF and modifying the types of employees who are excluded from RIF competition. OPM also proposes to revise its regulations regarding the reemployment priority list (RPL), career transition assistance program (CTAP), the interagency career transition assistance program (ICTAP), transfers of function, and furloughs.
Full Text
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[Federal Register Volume 91, Number 43 (Thursday, March 5, 2026)]
[Proposed Rules]
[Pages 10904-10934]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-04377]
[[Page 10903]]
Vol. 91
Thursday,
No. 43
March 5, 2026
Part III
Office of Personnel Management
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5 CFR Parts 316, 330, 351 et al.
Reduction in Force; Proposed Rule
Federal Register / Vol. 91, No. 43 / Thursday, March 5, 2026 /
Proposed Rules
[[Page 10904]]
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OFFICE OF PERSONNEL MANAGEMENT
5 CFR Parts 316, 330, 351, 353, 359, 362, and 430
[Docket ID: OPM-2025-0107]
RIN 3206-AO86
Reduction in Force
AGENCY: Office of Personnel Management.
ACTION: Proposed rule.
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SUMMARY: The Office of Personnel Management (OPM) is issuing a proposed
rule to revise its reduction-in-force (RIF) regulations. The proposed
rule would make the RIF regulations more streamlined, efficient, and
merit-based by prioritizing performance over tenure and length of
service when determining which employees will be retained in a RIF and
modifying the types of employees who are excluded from RIF competition.
OPM also proposes to revise its regulations regarding the reemployment
priority list (RPL), career transition assistance program (CTAP), the
interagency career transition assistance program (ICTAP), transfers of
function, and furloughs.
DATES: Comments must be received on or before May 4, 2026.
ADDRESSES: You may submit comments by using the Federal eRulemaking
Portal: <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Follow the instructions for
submitting comments.
All submissions must include the agency name and docket number or
RIN for this Federal Register document. Please arrange and identify
your comments about the regulatory text by subpart and section number.
If your comments relate to the supplementary information, please
reference the heading and page number in the supplementary section. All
comments must be received by the end of the comment period for them to
be considered. All comments and other submissions received generally
will be posted at <a href="https://regulations.gov">https://regulations.gov</a> as they are received, without
change, including any personal information provided. However, OPM
retains discretion to redact personal or sensitive information,
including but not limited to personal or sensitive information
pertaining to third parties. As required by 5 U.S.C. 553(b)(4), a
summary of this rule may be found in the docket for this rulemaking at
<a href="http://www.regulations.gov">www.regulations.gov</a>.
FOR FURTHER INFORMATION CONTACT: Mr. Noah Peters at (202) 606-0960 or
by email at <a href="/cdn-cgi/l/email-protection#4e2b233e2221370e213e2360292138"><span class="__cf_email__" data-cfemail="e98c8499858690a9869984c78e869f">[email protected]</span></a>.
SUPPLEMENTARY INFORMATION: OPM is proposing to revise its regulations
governing a RIF and make related changes to its regulations under
statutory authority found at 5 U.S.C. 1103, 1104, 1302, 3304, 3320,
3330, 3502, 3503, 3596, 4305, and 4315.
I. Agency Authority and History To Engage in RIFs
For approximately 150 years, Congress has recognized Federal
agencies' authority to engage in RIFs. The first such statute, enacted
in 1876, required that veterans receive a preference over other
employees when such reductions were undertaken. 19 Stat. 169 (Aug. 15,
1876); see also Hilton v. Sullivan, 334 U.S. 323, 336-39 (1948)
(summarizing history of veterans' preferences in reductions in force).
A subsequent enactment precluded agencies from discharging or reducing
the rank or salary of honorably discharged veterans. 37 Stat. 413 (Aug.
23, 1912). Interpreting this statutory framework, courts repeatedly
rejected challenges to RIFs, recognizing that such reductions were a
matter of executive discretion. See Medkirk v. United States, 45 Ct.
Cl. 395, 401(Ct. Cl. 1910) (``The matter of qualification as between
the persons then employed in the service was an administrative function
which the courts could neither supervise nor inquire into after the
exercise of the discretion of the proper official in dispensing with
the services of those adjudged to be least qualified under the law
which required a reduction in the force.''); Keim v. United States, 177
U.S. 290, 295 (1900) (provision authorizing reductions in force
``do[es] not contemplate the retention in office of a clerk who is
inefficient, nor attempt to transfer the power of determining the
question of efficiency from the heads of departments to the courts'').
Later, the Executive Branch implemented a system whereby employees
were placed into classes for purposes of determining which positions
would be eliminated in a RIF. In 1921, President Harding issued an
executive order directing demotions and dismissals of employees with
the lowest ratings in each class, with a preference provided to
veterans. Executive Order (E.O.) 3560. A subsequent executive order
issued by President Coolidge in 1929 detailed how to categorize
employees during a RIF. E.O. 5068. The Civil Service Commission then
issued regulations that codified the various requirements governing
RIFs. United States Civil Service Commission, Departmental Circular No.
372 (Sept. 4, 1942). These regulations recognized that a RIF may be
``necessary because of insufficient appropriations, consolidation of
functions, diminution of work, or other reason, whereby one or more
employees serving in other than temporary appointments will be required
to be dropped from the rolls.''
As World War II concluded, a widespread understanding emerged that
the Federal Government would need to shrink dramatically as the nation
shifted from a wartime footing to a peace-time posture. President
Roosevelt recognized that agencies may need to undertake reductions in
personnel: ``Veterans should be accorded special consideration in
connection with any reductions in total personnel which it may be
necessary for Federal agencies to work out from time to time.'' H.R.
Rep. No. 78-1289 (1944). Congress then enacted the Veterans' Preference
Act of 1944. The intent of the statute was to ``give legislative
sanction to existing veterans' preference, to the rules and regulations
in the executive branch of the Government. . . .'' Hilton, 334 U.S. 323
at 338 (quotation marks omitted). The statute provided, inter alia,
that ``[i]n any reduction in personnel in any civilian service of any
Federal agency, competing employees shall be released in accordance
with Civil Service Commission regulations which shall give due effect
to tenure of employment, military preference, length of service, and
efficiency ratings.'' Veterans' Preference Act of 1944, sec. 12, Public
Law 78-359, 58 Stat. 387, 390.
Similarly, in enacting the Federal Employee Pay Act of 1945,
Congress recognized the Executive Branch's authority to reduce the size
of the Government. A Senate Committee Report preceding enactment of the
Act stated: ``It was the feeling of the committee that the interests of
efficiency and economy could best be served a policy of reduction of
force in many Government agencies. By this proposal, authority of the
Director of the Bureau of the Budget to fix ceilings for agencies
within the executive branch is extended to all employees of executive
agencies, including the Postal Service, Wage Board employees as well as
employees subject to the Classification Act.'' S. Rep. No. 79-265, at 6
(1945).
In 1944, the Civil Service Commission exercised the authority
delegated by the Veterans' Preference Act of 1944 to enact regulations
governing reductions in force. See 9 FR 9575 (Aug. 8, 1944). The
regulations encouraged agencies to proactively manage the size of their
workforce. ``Looking ahead for changes in workloads, available funds
and employee turnover, and restricting appointments in certain lines of
work
[[Page 10905]]
may prevent a surplus in workers which would otherwise occur. It is
better practice to keep a working staff down to the number required
than to cut down an oversize staff of employees.'' Id. at 9576-77.
Since the regulations were promulgated in 1944, they have been
periodically amended and are codified at 5 CFR part 351.
In the 1966 recodification of Title 5, Congress amended the
Veterans' Preference Act of 1944. Public Law 89-554, 80 Stat. 428
(1966). The amended statute provided: ``[t]he Civil Service Commission
shall prescribe regulations for the release of competing employees in a
reduction in force which give due effect to'' four specified factors.
The current version of the statute is substantively the same, with OPM
substituted for the Civil Service Commission. 5 U.S.C. 3502. It
provides that OPM ``shall prescribe regulations for the release of
competing employees in a reduction in force which give due effect to--
(1) tenure of employment; (2) military preference, subject to section
3501(a)(3) of this title; (3) length of service; and (4) efficiency or
performance ratings.'' 5 U.S.C. 3502(a)(1)-(4).
In addition, the RIF statute provides that a preference eligible
employee with a compensable service-connected disability of 30 percent
or more whose performance has not been rated ``unacceptable'' is
entitled to be retention preference ahead of other veterans. Id.
3502(b). Other preference eligibles (that is, veterans) whose
performance has not been rated ``unacceptable'' are entitled to
retention preference ahead of other competing employees. Id. 3502(c).
The statute goes on to prescribe the content of the required RIF notice
and specifies that such notice must be provided to the employee and the
employee's exclusive bargaining representative 60 days before the
employee's release. Id. 3502(d). Pursuant to an amendment added as part
of the Workforce Investment Act of 1998, if the RIF ``would involve the
separation of a significant number of employees,'' certain state and
local government entities and officials must also be notified of the
RIF. Id. In addition, the President may shorten the required notice
period from 60 to 30 days (this authority has since been delegated to
OPM). Id. 3502(e), E.O. 12828 (Delegation of Certain Personnel
Management Authorities), 58 FR 2965. Under current regulations,
agencies may invoke RIF authority when the release of competing
employees is necessitated by a lack of work, shortage of funds, an
insufficient personnel ceiling, reorganization, the exercise of
reemployment rights or restoration rights, or reclassification of an
employee's position due to erosion of duties. 5 CFR 351.201. In the
context of a RIF, the term ``reorganization'' refers to the planned
elimination, addition, or redistribution of functions or duties in an
organization. Id. Sec. 351.203.
The regulations acknowledge agencies' discretion when deciding that
a RIF is necessary. An agency conducting a RIF must determine the
categories within which positions are required, where those positions
are to be located, and when those positions are to be filled,
abolished, or vacated. Sec. 351.201(a)(1). These agency decisions
include determining when there are too many employees at a particular
location in a particular line of work. The regulations further
emphasize that, when an agency determines a RIF is necessary, the
agency is responsible for following and applying the RIF regulations.
Sec. 351.204.
On numerous occasions since the Veterans' Preference Act of 1944
was enacted, the Federal Government has exercised its authority to
conduct RIFs. As noted, widespread reductions in the Federal workforce
were necessary after World War II ended. See 64 Ann. Rep. U.S. Civil
Service Comm'n 10 (1946-1947). President Truman acknowledged the
widespread reductions in force and expressed hope that separated
employees would be able to compete for other Federal positions.
President Truman also noted that ``[i]t is unrealistic to expect . . .
that all these employees can be placed in current vacancies in the
Federal service, which very properly is contracting in size.'' Harry S
Truman, Statement by the President on Federal Employees Displaced by
the Reduction-in-Force (Sept. 3, 1949), <a href="https://www.trumanlibrary.gov/library/publicpapers/201/statement-president-federal-employees-displaced-reduction-force">https://www.trumanlibrary.gov/library/publicpapers/201/statement-president-federal-employees-displaced-reduction-force</a>.
The 1980s also featured Executive Branch-led efforts to reduce the
Federal workforce, including through RIFs. These efforts were
undertaken under the Reagan Administration's policy of reducing the
size of Government. As President Reagan explained in a radio address,
``[f]ifteen departments, agencies, and commissions have been able to
reduce their payroll numbers by 20 percent or more.'' Ronald Reagan,
Radio Address to the Nation on Federal Civilian Employment (Aug. 20,
1983), <a href="https://www.reaganlibrary.gov/archives/speech/radio-address-nation-federal-civilian-employment">https://www.reaganlibrary.gov/archives/speech/radio-address-nation-federal-civilian-employment</a>.
In the 1990s, the Clinton Administration maintained the policies of
the Reagan Administration, both in terms of reducing the number of
Federal employees and in exercising control over agencies to ensure
that they were responsive to the President's policy goals. To promote
the goal of reducing the size of the Federal Government, President
Clinton issued E.O. 12839 the month after he took office. E.O. 12839,
58 FR 8515 (Feb. 10, 1993). The order outlined a plan to reduce 100,000
Federal positions. E.O. 12839 relied upon the President's authority
under the Constitution and U.S. statutes, including 3 U.S.C. 301, 5
U.S.C. 3301, and 31 U.S.C. 1111. The order required each executive
department or agency with over 100 employees to eliminate at least 4
percent of its civilian personnel positions (on a full-time equivalent
(FTE) basis) over 3 fiscal years. It further instructed that the
eliminated positions were to be vacated through attrition or ``early
out programs'' established at the discretion of the agency heads. The
E.O. also required at least 10 percent of the reductions to come from
the Senior Executive Service, GS-15 and GS-14 levels or equivalent.
Target dates for the reductions were 25 percent of total reductions by
the end of fiscal year (FY) 1993 and 62.5 percent by the end of FY
1994, with the reductions complete by the end of FY 1995. Finally, the
E.O. created a role for OMB in the implementation of these cuts,
instructing the Director of OMB to issue guidance directing agencies on
how to implement the order and allowing OMB to create exemptions as
necessary to ensure the continued delivery of essential services and
compliance with applicable law.
Later in 1993, President Clinton signed a presidential memorandum
entitled ``Streamlining the Bureaucracy'' in which he directed each
executive agency head to submit a streamlining plan to the OMB Director
as part of a goal to reduce the executive branch civilian work force by
252,000. 58 FR 48583 (Sept. 11, 1993). Also in 1993, President Clinton
signed a presidential memorandum directing executive agencies to
appoint officials responsible for, among other things, overseeing
agency-specific application of personnel reductions. Implementing
Management Reform in the Executive Branch, 58 FR 52393 (Oct. 1, 1993).
Ultimately, during the Clinton Administration, there was a substantial
reduction in the number of Federal employees, approximating 400,000,
due in part to the implementation of RIFs.
More recently, under President Trump, agencies prepared RIF and
reorganization plans pursuant to E.O. 14210, Implementing the
President's
[[Page 10906]]
``Department of Government Efficiency'' Workforce Optimization
Initiative. 90 FR 9669 (Feb. 14, 2025) (directing agencies, inter alia,
to ``promptly undertake preparations to initiate large-scale reductions
in force (RIFs), consistent with applicable law''). In addition, RIFs
were undertaken pursuant to E.O. 14242, Improving Education Outcomes by
Empowering Parents, States, and Communities, E.O. 14217 Commencing the
Reduction of the Federal Bureaucracy, and E.O. 14238, Continuing the
Reduction of the Federal Bureaucracy. See, respectively, 90 FR 13679
(March 25, 2025) (directing the Secretary of Education to ``to the
maximum extent appropriate and permitted by law, take all necessary
steps to facilitate the closure of the Department of Education''), 90
FR 10577 (Feb. 25, 2025) (directing that several government entities
``be eliminated to the maximum extent consistent with applicable
law''), and 90 FR 13043 (March 20, 2025) (same, except as to a
different set of government entities).
In 2025, the Trump Administration oversaw the largest peacetime
reduction in the size of the Federal workforce ever, some 317,000
employees (for a net reduction of about 250,000 employees). However,
the overwhelming majority of these departures (over 92.5%) were due to
voluntary programs like the Deferred Resignation Program, Voluntary
Early Retirement Authority, Voluntary Separation Incentive Payments,
and other voluntary resignations. Only a very small percentage of
departures resulted from RIFs.
II. OPM's Role
Since RIF rules were codified in the Veterans' Preference Act of
1944, Congress has given OPM (and its predecessor agency the Civil
Service Commission) broad authority to establish regulations necessary
for agencies to effectuate reductions in force. Despite statutory
amendments necessitating revisions to these regulations over the years,
the amount of discretion provided to OPM by Congress remains broad.
The applicable statute (5 U.S.C. 3502) directs OPM to prescribe
regulations ``for the release of competing employees in a reduction in
force'' that give ``due effect'' to four factors: tenure of employment;
military preference, length of service; and efficiency or performance
ratings. See 5 U.S.C. 3502(a). The statute does not further define
``reduction in force'' or ``competing employees.''
Through its years of administering RIF rules, which include
adjudicating requests for recognition of new competitive areas under 5
CFR 351.402 and shortened notice periods under 5 CFR 351.801, as well
as providing extensive guidance, technical assistance, and RIF services
to agencies on a reimbursable basis, OPM has accrued a deep knowledge
and unique perspective on the application of these provisions by
Federal agencies and their impact on the Federal workforce. In the 21st
century these rules have become cumbersome and inflexible. Congress has
granted agencies broad powers to reorganize and restructure their
workforce and has granted OPM broad regulatory authority to implement
appropriate RIF procedures (see 5 U.S.C. chapter 35, subchapter II).
But current RIF rules have calcified to the extent that they impede
timely, if not effective, agency restructuring efforts due to the
considerable investment in agency resources needed to invoke them. Over
the decades, this disparity has been grinding against the changing
needs of agencies which oftentimes include large-scale and urgent
workforce restructurings.
For example, one author (an experienced former Federal employee and
consultant for Federal agencies) called the current OPM RIF regulations
``the ultimate bureaucratic poison pill.'' Fred Mills, Civil
Disservice: Federal Employment Culture and the Challenge of Genuine
Reform, at p. 42 (iUniverse 2010). He explained: ``the RIF rules and
regulations are so complex and cumbersome, the process so time-
consuming and demoralizing, and the outcome so haphazard and invariably
negative, that it's the absolute last option any sane organization
would want to consider.'' Id.
OPM has seen these inefficiencies play out over the past year. OPM
has seen how the current regulatory framework has not always supported
agency downsizing efforts in an efficient manner. In 2025, OPM provided
technical policy advice on, as well as provided advice and assistance
and ran (on a reimbursable basis) numerous RIFs for Federal agencies.
The cumbersome and intricate rules make RIFs more time-consuming and
resource intensive than necessary and create the possibility of more
errors when agencies attempt implementation. Further, the current rules
prioritize tenure and length of service over performance ratings,
meaning that high-performing employees may be separated while lower-
performing, but more senior employees, may be retained in a RIF. As a
result, agencies need a more streamlined and merit-based regulatory
framework to support their workforce reshaping requirements.
In light of this, OPM is proposing these changes to improve the
efficiency of the RIF process to effect better outcomes with less
burden on agencies invoking these rules, and to increase the focus on
merit in determining retention standing. The current regulatory
framework has been in place for decades and emphasizes tenure and
length of service, non-merit factors, over employee performance. As
discussed in more detail in section IV.A., RIF rules have become
outdated and lack the flexibility that agencies need when downsizing in
the modern environment. Simply put, the current regulations are
antiquated and no longer reflect the needs of agencies operating in the
21st century. This framework may have been appropriate for an earlier
time but has not kept pace with changes in the size, scope, and
organizational complexity of Federal agencies, or the development and
establishment of many positions those agencies rely upon. Instead, the
current regulatory framework resembles the one in place in the late
1940s.
OPM is addressing this challenge by proposing a more efficient and
merit-based set of RIF rules that agencies can use in conjunction with
other modern downsizing tools, such as Voluntary Early Retirement
Authority (i.e., ``early outs'' or VERA) and Voluntary Separation
Incentive Payments (i.e., ``buyouts'' or VSIP), to address downsizing
needs. The proposed revisions make the RIF process more clearly focused
on merit by giving performance ratings a much more central role in
determining retention in a RIF. These proposed changes will better
assist agencies in retaining their top performers, which will leave
agencies better positioned to carry out their missions after a RIF
occurs. These proposals will also facilitate carrying out a RIF in an
efficient manner that will best serve the American public and with less
burden than under the current regulatory scheme.
III. Proposed Changes
OPM, under its statutory authority in 5 U.S.C. 3502, is proposing,
in accordance with the procedural requirements under 5 U.S.C. 1103(b),
to amend its regulations at subparts B, C, E, and H of 5 CFR part 351
and to make corresponding changes to part 316, subpart I, part 330,
subparts A, B, D, F, and G, part 351, subparts D, F, and G, part 362,
subpart B, and part 430, subpart B, to streamline, consolidate and
revise tenure groups I, II, III into a ``competitive service tenure
group'' and an ``excepted service tenure group,'' along with two
subgroups for each tenure group, as well as to prioritize
[[Page 10907]]
performance over tenure and length of service in a RIF. OPM is also
proposing changes in parts 351 and 359 under its statutory authority in
5 U.S.C. 3502 and 3596 to streamline and improve the process for
conducting RIFs, transfers of function, and furloughs in the Federal
government. The proposed changes will assist agencies in executing more
timely and efficient RIF actions and provide more flexibility for
agencies in reshaping their workforces consistent with Federal law.
Part 351, Subpart B
OPM proposes to modify Sec. 351.201(a)(2) to remove from the list
of actions that require agencies to use RIF procedures reclassification
of an employee's position due to erosion of duties if the action would
take effect after an agency had formally announced a RIF in the
employee's competitive area and the RIF would take effect within 180
days.
In 1986 revisions to its regulations, OPM generally removed
reclassifications due to erosion in duties from among the categories of
actions subject to RIF procedures. See 51 FR 319 (1986). In response to
concerns expressed by commenters at that time that agencies could
engage in RIF manipulation using erosion-of-duties reclassifications,
however, OPM specified that erosion-of-duties reclassifications would
continue to be subject to RIF procedures in one circumstance: when the
reclassification action would take effect after an agency had formally
announced a RIF in the employee's competitive area and the RIF would
take effect within 180 days. Id.
Upon review, OPM considers it unreasonable and impracticable to
require agencies to follow RIF procedures, including building a
retention register, when they reclassify an employee's position based
on erosion of duties within 180 days of an announced RIF. Indeed, OPM
is not aware of any agency actually executing an erosion-of-duties
reclassification action using RIF procedures since the 1986 revision to
its regulations. It is therefore confusing to include erosion-of-duties
reclassifications within 180 days of an announced RIF as one of the
categories of actions that require agencies to follow RIF procedures,
and OPM thus proposes to remove this category from Sec. 351.201(a)(2).
To address the earlier-expressed concern of commenters about
agencies using erosion-of-duties reclassifications to engage in RIF
manipulation, OPM proposes to revise Sec. 351.202(c)(3) to
straightforwardly bar agencies from undertaking an erosion-of-duties
reclassification action between the time an agency has formally
announced a reduction in force in the employee's competitive area and
the completion of the reduction in force, where the reclassification
action would adversely affect an employee's retention standing in the
proposed reduction in force.
Proposed Sec. 351.202(b) and (c) rename these paragraphs
`Employees exempted' and `Actions exempted' because covered individuals
and actions described therein are not subject to part 351.
Proposed Sec. 351.202(d), Removal of excluded employees, addresses
the employees encumbering the positions that are otherwise excluded
from the RIF mechanisms covered in part 351. Individuals in occupations
covered under proposed Sec. 351.202(d) are not competing employees for
purposes of a RIF and may be retained, furloughed, separated, demoted
or reassigned without following RIF procedures. That is, an agency may
choose to retain or terminate an employee in an excluded position at
its discretion when the agency has determined that a lack of work,
shortage of funds, insufficient personnel ceiling, reorganization, or
reclassification of the employee's position exists which would
otherwise require the agency to invoke reduction in force procedures.
This will give agencies more flexibility regarding whether to retain or
terminate these employees and will streamline the process of conducting
a RIF.
Proposed new Sec. 351.202(d) establishes the list of employees
excluded from RIF procedures, as they fall outside the definition of
``competing employees'' under 5 U.S.C. 3502(a) whose release due to
furlough, separation, demotion, or reassignment due to lack of work,
shortage of funds, insufficient personnel ceiling; reorganization, or
the exercise of reemployment rights or restoration rights is subject to
RIF procedures. Since U.S.C. 3502 does not define ``competing
employees,'' OPM has for many years supplied by regulation a definition
of the categories of ``competing employees'' whose release is subject
to RIF procedures. See 5 CFR 351.203.
OPM has long defined ``competing employees'' by reference to tenure
groups, differentiated by such factors as whether the employee has
competitive status and has completed a probationary period, whether the
employee has career or career-conditional status, and whether the
employee is serving a temporary, term or indefinite appointment. The
statutory term ``competing employees'' most naturally refers to
employees in the competitive service whose appointment has been
finalized; i.e., who have successfully completed a probationary period.
See 5 U.S.C. 3321(a) (allowing the President to ``take such action,
including the issuance of rules, regulations, and directives'' to
``provide . . . for a period of probation . . . before an appointment
in the competitive service becomes final.''); 5 U.S.C. 7511 (excluding
individuals serving probationary and trial periods under an initial
appointment from the statutory definition of the term ``employee''); 5
CFR 11.5 (requiring that an agency certify that continuing a
probationary or trial period employee in the Federal service would
``advance[] the public interest'' before ``finalization of their
appointment to the Federal service.'').
Congress has broadly directed that appointments to the excepted
service also follow the principle of veterans' preference, see 5 U.S.C.
3320, and has delegated the responsibility for implementing that policy
to OPM, see 5 U.S.C. 1302(c) (directing OPM to implement this
congressional policy with respect to ``retention'' in the excepted
service). Thus, OPM's RIF regulations have also traditionally
encompassed some categories of excepted service employees. However,
OPM's regulations give agencies discretion in providing assignment
rights to excepted service employees, see 5 CFR 351.705.
OPM is now updating its definition of ``competing employees,'' and,
in proposed Sec. 351.202(d), is specifying expressly the categories of
employees who fall outside RIF competition. OPM's revised definition of
``competing employees'' includes employees in the competitive service
tenure group and the excepted service tenure group. The competitive
service tenure group includes all employees in the competitive service
with a career who, as of the date of the applicable RIF notice, are not
serving an initial probationary period or a temporary or time-limited
appointment of 1 year or less under subpart C or subpart D of part 316
of this chapter. The competitive service tenure group is further
divided between tenure subgroup I (consisting of all career employees,
as that term is used in part 315 of this chapter [typically those
employees with more than 3 years of creditable service]) and subgroup
II (all other competitive service employees who have completed an
initial probationary period and are not serving under a temporary or
time-limited appointment of 1 year or less).
The excepted service tenure group is defined as all employees
occupying a career position (as defined in part 213 of this chapter) in
the excepted service
[[Page 10908]]
who is not serving a trial period pursuant to 5 CFR 11.3. The excepted
service tenure group is further divided into tenure subgroups: subgroup
I (consisting of all career [i.e., not Schedule C or G] excepted
service employees who are not serving a trial period and whose
employment carries no restriction or condition such as conditional,
indefinite, or specific time limit), and subgroup II (consisting of all
other excepted service employees who are not serving a trial period and
who are not serving in a temporary or time-limited appointment of 1
year or less).
OPM is also providing a formal definition of ``reduction in
force'': the release of a competing employee from his or her
competitive level by furlough for more than 30 days, separation, or
demotion, or reassignment requiring displacement, when the release is
required because of lack of work; shortage of funds; insufficient
personnel ceiling; reorganization; or the exercise of reemployment
rights or restoration rights. This definition closely tracks the
longstanding coverage of OPM's RIF regulations, as reflected in 5 CFR
351.201(a)(2). Since the procedures specified in 5 U.S.C. 3502(d) only
apply to employees who are released ``due to a reduction in force,''
employees who are not ``competing employees'' may be retained or
separated independent of ``competing employees,'' and they do not
require the notice set for in 5 U.S.C. 3502(d) when they are separated,
furloughed, released, or reassigned.
Under OPM's revised definition of ``competing employees,'' and its
definition of ``reduction in force,'' several enumerated groups of
employees would be excluded from RIF competition. Proposed Sec.
351.202(d) specifies that the provisions of this part do not apply to
these groups of employees. Thus, an employee holding one of these
appointments may be retained, furloughed, separated, demoted or
reassigned without regard to the provisions of this part. They include
employees on time-limited appointments of 1 year or less and employees
serving probationary and trial periods. These are typically more
junior, less-tenured employees who have historically been the first
ones separated in a RIF. Specifying that the retention, furlough,
separation, demotion or reassignment of these employees is not subject
to RIF procedures would streamline RIF processes and the management of
these positions without unduly disadvantaging these employees.
Exempting these employees from RIF procedures would in fact make it
more likely that they could continue Federal employment, as it would
enable agencies to retain such employees without regard to their
standing in a retention register.
Under OPM's definition of ``competing employees,'' employees in the
competitive service who are serving an initial probationary period
would be excluded from RIF procedures. OPM is making this change for
several reasons. First, these employees will typically not have a
rating of record, meaning that they cannot yet be evaluated based on
their performance, and OPM intends to make performance the primary
consideration for whether an employee is retained in a RIF. It would
not be fair to include such employees in RIF competition. Second,
employees who have not completed an initial probationary period are not
considered to have finalized appointments to their positions. Third,
employees serving an initial probationary period have traditionally had
the lowest retention standing, and it is administratively burdensome to
continue including them on retention registers and to require their
separation in an agency undergoing restructuring to be done according
to complicated RIF procedures. Fourth, these employees are unlikely to
be unduly disadvantaged by being excluded from RIF procedures. That is
because employees serving an initial probationary period are typically
the first ones separated in a RIF. Allowing the decision to retain
these employees to be separate from their standing in a retention
register would make it more likely that they could be retained in an
agency or agency component that was reducing positions. Fifth, 5 CFR
11.5 allows employees serving an initial probationary period to be
terminated based on the needs and interests of the agency and the
organizational goals of the agency and the Government, which would
encompass termination due to lack of work and organizational
restructuring. There is no need to require agencies to undergo more
cumbersome procedures to terminate employees whose appointments to the
competitive service have not been finalized and whom agencies must
evaluate to determine whether their permanent employment would advance
the public interest. Sixth, employees serving an initial probationary
period are also excluded from adverse action procedures pursuant to 5
U.S.C. 7511 and the corresponding definition of ``employee'' in that
section, indicating that Congress meant for agencies to have great
flexibility regarding the employment of these employees. Requiring
employees to be subject to cumbersome and inflexible RIF procedures
would be contrary to Congress's intent in excluding employees serving
an initial probationary period from adverse action procedures.
OPM notes that, however, a supervisory or managerial employee with
career tenure but who is only on probation with respect to those
supervisory or managerial functions (i.e., is entitled to be returned
to a nonsupervisory or non-managerial position rather than being
subject to removal; see 5 CFR part 315, subpart I) would be included in
the RIF in the supervisory or managerial position. Further, an employee
who is serving both an initial probationary period and a supervisory
probationary period simultaneously is exempt from RIF procedures. OPM
proposes to add a definition of Initial probationary period to Sec.
351.202 to clarify this point. It is also adding a definition of Trial
period--defining it in the same manner as it is defined in 5 CFR 11.3--
to add further clarity.
The proposed paragraph (d) also enumerates many exclusions for
excepted service positions from the RIF procedures. For example,
employees holding a career position (as defined in part 213 of this
chapter, i.e. not a Schedule C or G employee) in the excepted service
who are serving a trial period would not be subject to the RIF
procedures. The exclusion for trial period employees in the excepted
service is supported by similar logic to that supporting the exclusion
of probationary employees in the competitive service: these employees
do not have a finalized appointment to their position and frequently
will not have received a performance review. Further, 5 CFR 11.5 allows
trial period employees to be terminated based on the needs and
interests of the agency and the organizational goals of the agency and
the Government, which would encompass termination due to lack of work
and organizational restructuring.
In addition, competitive and excepted service employees who are
serving temporary or time-limited appointments of 1 year or less would
be excluded from RIF competition. In the case of employees serving
temporary or time-limited appointments of 1 year or less, it is
unnecessarily burdensome to require agencies to undergo RIF procedures
to separate such employees before their expected end date. OPM has
traditionally excluded at least some categories of employees on
temporary appointments of less than a year from RIF competition. For
example, in its
[[Page 10909]]
regulations at 5 CFR 316.911, OPM recognizes that employees ``whose
initial appointment [is] for a period of 1 year or less are not
assigned a tenure group and do not compete with other employees in a
RIF.''
Excluding these categories of employees would streamline the
operation of a RIF, while making it more likely that an agency would be
able to retain these employees, as the decision to retain or separate
these employees would no longer depend on their retention standing.
Employees holding such appointments could be retained or separated
without regard to RIF procedures. In addition, Schedule C and Schedule
G appointments would expressly not be subject to RIF procedures. (It is
doubtful that any agencies have ever actually used RIF procedures when
retaining or terminating such non-career employees.) OPM is making
corresponding changes to 5 CFR part 351, subpart E--Retention Standing.
OPM expects that agencies undergoing restructuring will
appropriately account for these categories of employees (that is,
employees serving initial probationary periods or trial periods,
employees serving temporary or time-limited appointments of 1 year or
less, and Schedule C and G employees) in their workforce planning
efforts, consistent with budgetary constraints and mission needs.\1\
OPM is additionally specifying that, for an agency to utilize the
procedures under proposed 5 CFR 351.605 (abolishment of a competitive
area), it must abolish the positions of these employees as well.
However, OPM believes that removing these categories of employees from
formal RIF procedures will enhance efficient and flexible workforce
management, allowing for agencies to retain or separate from these
employees without having to follow complex RIF procedures.
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\1\ If the agency chooses to separate these employees as part of
its workforce restructuring efforts, they must receive such notice
as is required un, they must receive such notice as is required
under other parts of the Civil Service Rules and regulations
pursuant to their employment status and appointing authority, and as
may be provided for under the terms of agency regulations (along
with other applicable sources of law). See, e.g., 5 CFR 11.5.
---------------------------------------------------------------------------
Proposed Sec. 351.203 modifies the definition of the term
Competing employee to mean an employee in the competitive service
tenure group or the excepted service tenure group consistent with
changes in proposed Sec. 351.202 and the proposed definitions of the
tenure groups in Sec. 351.502. It also adds a definition of
Competitive service tenure group to mean all employees within
competitive service tenure subgroups I and II; that is, all employees
in the competitive service who, as of the date of the RIF notice, are
not serving an initial probationary period or a temporary or time-
limited appointment of 1 year or less under subpart C or subpart D of 5
CFR part 316. OPM also proposes to define the Excepted service tenure
group as all employees within excepted service tenure subgroups I and
II; that is, all excepted service appointees serving in a career
position (that is, not in Schedule C or G) who, as of the date of the
RIF notice, are not serving a trial period or in a temporary or time-
limited appointment of 1 year or less.
Proposed Sec. 351.203 also modifies the current definitions for
current rating of record and rating of record. The revision to current
rating of record updates the cross reference within part 351. The
revision to rating of record clarifies that only the annual performance
evaluation--and not a mid-year within-grade evaluation--can be used
when computing the performance credit, which is used for determining
standing on the retention register.
Proposed Sec. 351.203 also modifies the definition of the term
furlough to exclude an emergency shutdown furlough caused by a lapse in
congressional appropriations where the ultimate duration of the
furlough is not known by the agency at the outset of the furlough and
is instead dependent entirely on congressional action, rather than
agency action. This change in the definition of furlough aligns with
longstanding OPM guidance, which explains that OPM's ``RIF furlough
regulations. . . contemplate planned, foreseeable, money-saving
furloughs that, at the outset, are planned to exceed 30 days,'' not
emergency shutdown furloughs caused by lapses in congressional
appropriations where the length of the furlough is not known in
advance.\2\ In practical terms, this change is meant to relieve
agencies from the burden of having to send successive furlough notices
where a lapse in appropriations lasts more than 30 days--a burden that
is especially acute when employees may be temporarily forced to work
without pay during an extended government shutdown. Finally, proposed
Sec. 351.203 modifies the definition of transfer of function to adhere
to the text of the applicable statute enacted by Congress to govern
transfers of function, 5 U.S.C. 3503. That statute only applies to a
situation ``[w]hen a function is transferred from one agency to another
. . . .'' (emphasis added). Nonetheless, OPM's current regulations
require an agency to proceed under transfer-of-function procedures
whenever a function is transferred from one competitive area to
another--even if both competitive areas are within a single agency.
These regulations unjustifiably deviate from the plain text of 5 U.S.C.
3503, which speaks clearly of transfers of functions between agencies,
not within agencies.\3\
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\2\ OPM, Guidance for Shutdown Furloughs, at pp. 44-45 (revised
September 2025), available at <a href="https://opm.gov/policy-data-oversight/pay-leave/reference-materials/guidance-for-shutdown-furloughs-sep-28-2025/">https://opm.gov/policy-data-oversight/pay-leave/reference-materials/guidance-for-shutdown-furloughs-sep-28-2025/</a>; OPM, Answers to Frequently Asked Funding Lapse Questions,
at p. 2 (Jan. 18, 2019), available at <a href="https://www.opm.gov/chcoc/transmittals/2019/answers-frequently-asked-funding-lapse-questions_508.pdf">https://www.opm.gov/chcoc/transmittals/2019/answers-frequently-asked-funding-lapse-questions_508.pdf</a>.
\3\ See, e.g., Bondi v. VanDerStok, 604 U.S. 458, 477 n. 4
(2025) (statutory interpretation requires ``interpret[ing] the words
Congress enacted consistent with their ordinary meaning.'')
(internal quotation marks omitted); Brown v. Gardner, 513 U.S. 115,
122 (1994) (``A regulation's age is no antidote to clear
inconsistency with a statute,'' especially where the regulatory text
``flies against the plain language of the statutory text'').
---------------------------------------------------------------------------
In addition to not being required by the statutory text, the
requirement to follow elaborate transfer-of-function procedures
whenever a function is transferred within an agency imposes unnecessary
burdens on agencies seeking to reorganize and realign functions to keep
up with evolving mission needs; inhibits agencies from undertaking
internal movements of personnel that would benefit the government; and
generates litigation costs for agencies without meaningfully advancing
merit principles.\4\ Notably, the regulations governing transfers of
function applicable to the Senior Executive Service (SES) apply only to
``the transfer of the performance of a continuing function from one
agency to one or more other agencies.'' 5 CFR 359.608 (emphasis added);
see also 5 U.S.C. 3595 (providing to the SES rights comparable to those
provided by 5 U.S.C. 3503). The changed definition of ``transfer of
function'' in proposed Sec. 351.203 would ensure a consistent
application of ``transfer of function'' provisions between the
regulations governing SES and non-SES employees.
---------------------------------------------------------------------------
\4\ See, e.g., Cross v. Dep't of Transp., 127 F.3d 1443, 1449
(Fed. Cir. 1997); Roche v. U.S. Postal Serv., No. NY-0752-93-0178-I-
1, 1995 WL 132671 (M.S.P.B. Mar. 20, 1995), aff'd, 80 F.3d 468 (Fed.
Cir. 1996); Neilson v. Fed. Highway Admin., 21 M.S.P.R. 178, 180
(1984); Prince v. Dep't of Transp., 11 M.S.P.R. 584, 586 (1982).
---------------------------------------------------------------------------
OPM is also proposing to modify Sec. 351.203 Definitions by adding
meanings for agency, Government obligation and military spouse.
OPM is defining agency to mean an ``Executive agency'' as defined
in 5 U.S.C. 105, along with the Government
[[Page 10910]]
Publishing Office (GPO) except that it does not include the U.S.
Government Accountability Office (GAO). At present, part 351 applies to
the Executive Branch of the Federal Government and those parts of the
Federal Government outside the Executive Branch which are subject to
the competitive service requirements. The GPO has competitive service
employees; GAO does not. See 4 CFR 3.1.
OPM is defining Government obligation for purposes of Sec.
351.608(c) to mean a legal or moral duty or action whether the duty or
action is imposed by law, contract, promise, social relations,
courtesy, kindness, or morality. A Government obligation may include,
but is not limited to, retaining an employee to enable the employee to
maintain and utilize his or her health insurance during pregnancy until
the birth of a child or utilizing paid parental leave following the
birth or placement of a child for adoption purposes. OPM is
establishing this definition to help clarify the types of circumstances
for which an agency may grant a temporary exception under Sec.
351.608(c). Finally, OPM is defining military spouses for purposes of
proposed Sec. 351.608(f) to mean a spouse of a member of the armed
forces or service member as defined in 5 CFR 315.612(b)(4)(i).
OPM is correcting a typo in Sec. 351.204 to change ``reduction
force'' to ``reduction in force.''
Part 351, Subpart C
The proposed revisions substitute the word ``agency'' for
``competitive area'' throughout subpart C and make other conforming
changes, so as to align with the text of the statute Congress enacted
governing transfers of functions (5 U.S.C. 3503), which applies to
transfers of functions between agencies, not within agencies.\5\ In
addition, these revisions remove unnecessary burdens on agencies
transferring functions within a single agency, allowing agencies to
adapt to changing mission needs, better perform statutory functions,
and more efficiently manage employees without having to undergo
cumbersome procedural requirements to allow employees to transfer
alongside their associated function whenever functions are transferred
within an agency. The proposed revisions also align the definition of
``transfer of function'' in Sec. 351.203 with the usage of the same
phrase in 5 CFR 359.608, which is applicable to the SES. Transfers and
reassignments of employees in the competitive service within agencies
would continue to be governed by 5 CFR part 335; transfers and
reassignments of employees within agencies in the excepted service
would continue to be governed by 5 CFR parts 213 and 302.
---------------------------------------------------------------------------
\5\ See footnote 3, supra, and sources cited therein.
---------------------------------------------------------------------------
OPM proposes to revise Sec. 351.302(b) to remove the unclear term
``liquidation'' and make the meaning of this section more plain by
adapting language from OPM's Workforce Reshaping Handbook explaining
its practical operation.\6\ The revised Sec. 351.302(b) explains, in
accordance with the Workforce Reshaping Operations Handbook, that when
an employee who is transferred is identified with a function or
functions that will be terminated in the gaining agency within 60 days,
the transferred employee is not a competing employee for other
positions in the agency gaining the function, and does not have a right
to any continuing positions in the agency gaining the function or
functions.
---------------------------------------------------------------------------
\6\ OPM, Workforce Reshaping Operations Handbook (p. 100),
available at <a href="https://www.opm.gov/policy-data-oversight/workforce-restructuring/reductions-in-force-rif/workforce_reshaping.pdf">https://www.opm.gov/policy-data-oversight/workforce-restructuring/reductions-in-force-rif/workforce_reshaping.pdf</a>.
---------------------------------------------------------------------------
The proposed revision to Sec. 351.302(g) clarifies the procedures
that agencies must follow in asking employees whether they wish to
transfer with the function, when functions are transferred between
agencies. It clarifies that this procedure applies only to employees
who have been identified with the transferring function via Sec.
351.303. It also clarifies that agencies may require the employee to
respond to the canvass letter asking the employee whether he or she
wishes to transfer with the function within a set period of time but
must give the employee at least 30 days to consider the offer. The
revision specifies that an agency may treat a failure to respond to the
canvass letter as a declination of the offer to transfer with the
function, unless the employee establishes that the failure to respond
within the specified timeframe was due to circumstances beyond the
employee's control such as the employee not receiving the letter or
employee or family member illness. OPM also proposes to remove some of
the provisions of Sec. 351.302 regarding allowing and disallowing
employees to change their initial decisions whether to transfer with
the function (depending on whether the employee is seeking to change
from initial acceptance of the transfer to subsequent declination,
versus initial declination to subsequent acceptance). OPM's intention
in proposing this change is to allow the agency flexibility and
discretion as to whether to allow an employee to change his or her mind
or not.
OPM's proposed revision to Sec. 351.303 significantly simplifies
the process for identifying which employees are identified with the
transferring function. In place of ``Identification Method One''
(paragraph (c)), ``Identification Method Two'' (paragraph (d)), and
paragraph (e), which allows employees to volunteer to transfer with the
function in place of employees identified by Identification Method One
and Identification Method Two, OPM proposes a single, simple method of
identifying which positions are identified with the transferring
function: whether the agency determines that an employee performs the
transferring function during at least half of his or her work time, as
determined by such sources as the employee's position description, work
reports, organizational time logs, work schedules, and information
obtained from supervisors.
Part 351, Subpart D
Proposed Sec. 351.402(b) redefines and simplifies the definition
of a competitive area to provide additional clarity for agencies in
managing their reduction in force activities and to remove confusing
and outdated language in the current regulation. The proposed language
will allow agencies to designate a competitive area as being any
organizational unit, or combination of organizational units, on an
agency's official organizational chart. Organizational charts must be
available on the agency's public facing web page or otherwise
appropriately documented by the agency.\7\ An organizational unit for
these purposes must be designated/approved by the head of the agency,
or designee, and the designation or approval cannot be redelegated to
an official below the agency's headquarters level.
---------------------------------------------------------------------------
\7\ The flexibility to not post the organizational chart on a
public-facing website would be particularly important for agencies
and sub-agencies in the Intelligence Community or whom otherwise
have national security missions, as posting an organizational chart
on a public-facing website might be problematic for these agencies.
---------------------------------------------------------------------------
In addition, OPM proposes to revise Sec. 351.402(b) to require
that an organizational unit for purposes of a RIF must be clearly
distinguished from other organizational units with regard to its
operation, work function, staff, and supervisory oversight. OPM
believes this terminology--drawn in part from OPM's Workforce Reshaping
Operations Handbook \8\--is clearer than the present
[[Page 10911]]
language in Sec. 351.402(b) that ``[t]he minimum competitive area is a
subdivision of the agency under separate administration within the
local commuting area,'' while addressing the same concern: that an
agency will seek to identify a competitive area solely for RIF purposes
that does not align with its bona fide organizational structure. OPM's
experience is that the phrase ``under separate administration'' is
vague and generates unnecessary confusion. Further, OPM believes the
current terminology is not aligned with the operational realities of
Federal agencies, where many components may be ``under separate
administration'' in some important respects, but under centralized
administration in other important respects. OPM believes its proposed
alternative language, by contrast, is clearer and more specific, and
more aligned with the ways in which organizational units within an
agency may be properly differentiated from one another.
---------------------------------------------------------------------------
\8\ OPM, Workforce Reshaping Operations Handbook, at pp. 30, 32,
available at <a href="https://www.opm.gov/policy-data-oversight/workforce-restructuring/reductions-in-force-rif/workforce_reshaping.pdf">https://www.opm.gov/policy-data-oversight/workforce-restructuring/reductions-in-force-rif/workforce_reshaping.pdf</a>.
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In addition, OPM proposes that field or regional offices officially
established by the agency as discrete organizational units and shown on
the agency's official organizational chart may be their own competitive
area(s). For example, an agency may have an officially established
headquarters office and officially established regional offices (e.g.,
North region, South region, East region, and West region). In this
example, each region could be its own competitive area.
If an employee works from an approved alternate location, then the
employee must be assigned to the competitive area for the
organizational unit to which they are formally assigned within the
organization. For example, an employee working at an alternate location
as a result of a reasonable accommodation or an agency-approved
exemption to the ``Return to In-Person Work'' Presidential Memorandum
of January 20, 2025 (90 FR 8251) would compete with the assigned
organizational unit and could not be placed in a competitive area based
on the geographic location where he or she works. An agency may create
a separate competitive area for employees who are assigned to a
geographic location, such as a national park or a county. For example,
four employees assigned to the same geographic location or territory
may be treated as one competitive area, even if they are in separate
organizational units. When applying this provision, geographic location
is the competitive area. This provision does not include employees who
happen to work from different geographic locations as a part of a
reasonable accommodation or Return to In-Person Work exemption, as
those employees must be assigned to the competitive area for the
organizational unit to which they are officially assigned, without
regard to their geographic location.
Part 351, Subpart E
OPM is proposing to revamp 5 CFR part 351, subpart E ``Retention
Standing,'' with revised and reorganized content in Sec. Sec. 351.501
through 351.504. As an initial matter, OPM is proposing to renumber
current Sec. 351.505 Records and Sec. 351.506 Effective date of
retention standing to Sec. 351.506 Records and Sec. 351.507 Effective
date of retention standing, respectively. In addition, OPM is proposing
to modify the order of retention at 5 CFR 351.501. Specifically, when
determining the order in which employees are placed on a RIF retention
register, agencies will do so on the basis of whether the employee is
in the competitive service tenure group or excepted service tenure
group. Within each group, employees will be ranked based on
performance, as augmented by additional points for veterans'
preference. Where employees are tied, the employee in the higher tenure
subgroup (with subgroup I ranked ahead of subgroup II) will be ranked
ahead, as outlined in further detail below. When employees are still
tied, the employee with the longer service will be ranked ahead.
Proposed Sec. 351.501 Order of retention would establish the order
that competing employees in a RIF would be classified on a retention
register. OPM is proposing to delete current Sec. 351.502 Order of
retention--excepted service and cover these provisions in proposed
Sec. 351.501. Section 351.501 would also be reframed to clarify that
the order of retention provisions apply to employees in both the
competitive and excepted services.
Under current regulations at 5 CFR 351.501 (entitled ``Order of
retention--competitive service''), the order of retention for
classifying competing employees on a retention register is (in
descending order): (1) tenure of employment, (2) veterans' preference,
(3) length of service, and (4) performance. Length of service is
augmented by performance; an employee receives additional retention
service credit (i.e., additional years of service) based on the
employee's applicable ratings of record. OPM is proposing to modify the
order of retention to make performance ratings a more significant
factor. The United States deserves a federal workforce that is high-
quality, efficient, and dedicated to the public interest. By elevating
performance in the order of retention, the employees who are best
contributing to the mission will be more likely to be retained during
restructuring.
In proposing to place performance and veterans' preference ahead of
tenure and length of service in determining retention standing, OPM is
also guided by the experience of the Department of Defense (DOD).
Section 1101 of the National Defense Authorization Act (NDAA) for
Fiscal Year 2016 (Pub. L. 114-92), enacted on November 25, 2015,
directed that the Secretary of Defense establish procedures to provide
that, in any reduction in force of civilian positions in the
competitive or excepted service, the order of retention will be based
primarily on performance. In implementing this statutory mandate, DOD
implemented procedures for RIFs that placed performance ahead of
tenure, veterans' preference, and length of service. The operative
statute was amended in December 2021 to remove the directive that
employee performance be the ``primary'' factor in determining which
employees are to be separated by a RIF--instead, it is one factor that
the Secretary may consider. See 10 U.S.C. 1597(e). However, DOD has
continued to adhere to a performance-first system for determining which
employees are separated in a RIF,\9\ as DOD believes that prioritizing
performance over tenure and other factors in RIFs supports mission
readiness and a high-performing workforce. OPM has studied DOD's
procedures and, while it does not adopt them in whole, it is convinced
by DOD's experience that prioritizing performance is the right approach
and that a performance-first approach is facilitated by prioritizing
performance ratings, as augmented by veteran's preference, ahead of
tenure and length of service in determining RIF retention standing.
---------------------------------------------------------------------------
\9\ See DOD Instruction 1400.25, Volume 351, DoD Civilian
Personnel Management System: Reduction in Force (June 24, 2021).
---------------------------------------------------------------------------
Under the current regulations at 5 CFR 351.504, credit for
performance is used to supplement an employee's length of service for
purposes of determining an employee's standing on a retention register
(both of these retention factors are expressed in years). An employee
receives additional retention service credit based on his or her
performance as reflected in up to three ratings of record and their
assigned summary levels received within the last four years. This
[[Page 10912]]
additional credit is added to the employee's length of service to
determine that employee's retention standing within the employee's
appropriate tenure group and veterans' preference subgroup. The
additional credit for performance is: 20 additional years of service
for each rating of record with a Level 5 (Outstanding or equivalent)
summary level; 16 additional years of service for each rating of record
with a Level 4 (Exceeds Fully Successful or equivalent) summary level;
and 12 additional years of service for each rating of record with a
Level 3 (Fully Successful or equivalent) summary level, in accordance
with the summary levels described in 5 CFR 430.208. The additional
years of service are added together, divided by 3, and rounded up to a
whole number, if necessary, to determine the number of years that will
be used to adjust an employee's actual service computation date and
arrive at an adjusted service computation date for RIF purposes.
OPM is proposing to elevate performance above tenure and length of
service in the RIF order of retention. Under this proposal, employees
competing in a RIF will first be sorted into: their appropriate tenure
group (competitive service versus excepted service); then within each
tenure group, by performance in descending order based on values
assigned for the employee's three most recent ratings of record (i.e.,
performance credit--see discussion of proposed Sec. 351.503). Then,
performance credits would be augmented by additional points based on
veterans' preference, as discussed in proposed Sec. 351.504. Where two
employees have the same performance credit, as augmented by veterans'
preference, the tie would be broken according to which employee is in
the higher tenure subgroup (with subgroup I ranked ahead of subgroup
II). If the employees are still tied, the tie would be broken based on
length of service based on each employee's actual service computation
date. Thus, length of service will be used as a tie-breaker for
employees with the same performance credit (as augmented by veterans'
preference) and in the same tenure group and subgroup.
In proposed Sec. 351.502 Tenure of employment, OPM is proposing to
redefine the tenure groups for both the competitive and excepted
services, based on proposed changes to Sec. 351.202(b) Employees
excluded, and the new definitions of ``competitive service tenure
group'' and ``excepted service tenure group'' proposed in Sec.
351.202. The proposed competitive service tenure group would consist of
all competitive service employees (in accordance with the provisions of
Sec. 315.201) who are not (as of the date of the RIF notice) serving
an initial probationary period or a temporary or time-limited
appointment of 1 year or less under 5 CFR part 316. The proposed
excepted service tenure group would consist of excepted service
employees occupying a career position (as defined in Sec. 213.101) who
are not serving a trial period and are not serving in a temporary or
time-limited appointment of 1 year or less.
OPM also proposes to identify two tenure subgroups within both the
competitive service tenure group and the excepted service tenure group,
in alignment with proposed changes proposed changes to Sec. 351.202(b)
Employees excluded, and the new definitions of ``competitive service
tenure group'' and ``excepted service tenure group'' proposed in Sec.
351.202. Competitive service tenure subgroup I would include each
career employee in the competitive service who, as of the date the
agency issues a specific reduction in force notice, is not serving an
initial probationary period. This definition is substantially the same
as the current competitive service tenure group I.
Competitive service tenure subgroup II would consist of every other
competitive service employee who, as of the date of the RIF notice, is
not serving an initial probationary period or a temporary or term
appointment of 1 year or less. OPM is proposing to exclude employees
serving an initial probationary period and a temporary or time-limited
appointment of 1 year or less from competitive service tenure subgroup
II, and the competitive service tenure group, for the reasons explained
above in connection with proposed changes to Sec. 351.202(b): that is,
to give agencies undergoing workforce restructuring additional
flexibility in determining whether to retain or separate these
employees (to the extent that these employee are not otherwise covered
under the proposed competitive service tenure subgroups I and II). OPM
believes that streamlining and simplifying current competitive service
tenure groups I, II and III into two tenure subgroups, with exclusions
for employees serving an initial probationary period or a time-limited
or temporary appointment of 1 year or less, will aid in making RIF
procedures more streamlined and merit-based by reducing the importance
of tenure in the RIF process.
Excepted service tenure subgroup I would include all employees
occupying a career position (that is to say, not in Schedule C or G) in
the excepted service who, as of the date the agency issues a specific
reduction in force notice, are not serving a trial period and whose
appointment carries no restriction or condition such as conditional,
indefinite, or specific time limit. This definition is substantially
the same as current excepted service tenure group I. Excepted service
tenure subgroup II would consist of all other career employees in the
excepted service (that is to say, not in Schedule C or G) who are not
serving a trial period or a temporary or time-limited appointment of 1
year or less. OPM is proposing to exclude trial period employees from
the excepted service tenure subgroup II for reasons explained above in
connection with proposed changes to Sec. 351.202(b), and notes that
excepted service employees serving temporary appointments of 1 year or
less are generally excluded from RIF competition under current
regulations. OPM believes that streamlining and simplifying current
excepted service tenure groups I, II and III into two tenure subgroups,
with exclusions for employees serving a trial period or a time-limited
or temporary appointment of 1 year or less, will aid in making RIF
procedures more streamlined and merit-based by reducing the importance
of tenure in the RIF process.
Proposed Sec. 351.503 Performance establishes that an agency will
list employees on a RIF retention register (within the same tenure
group) based on each employee's calculated performance credit.
Generally, the three most recent ratings of record received during the
4-year period prior to the date of issuance of reduction in force
notices may be considered; however, an agency may establish a cut-off
date after which no new rating of record will be considered. See
proposed paragraph (c)(2) of Sec. 351.503. See also the subsequent
discussion of Sec. 351.503(f) regarding situations in which an
employee does not have three ratings of record.
We are proposing that an agency calculate a value to represent an
employee's performance credit. Ratings of record will be assigned a
numerical value in conjunction with the patterns of summary level in 5
CFR 430.208(d) as follows:
<bullet> 7 for a Level 5 (Outstanding or equivalent) summary level,
<bullet> 5 for a Level 4 (Exceeds Fully Successful or equivalent)
summary level,
<bullet> 3 for a Level 3 (Fully Successful or equivalent) summary
level,
[[Page 10913]]
<bullet> 0 for a Level 2 (Minimally Successful or equivalent)
summary level,\10\ and
---------------------------------------------------------------------------
\10\ In a separate rulemaking (91 FR 8780, Feb. 24, 2026), OPM
has proposed to remove the Level 2 summary level. OPM would make
conforming edits to part 351 based on the changes finalized in that
rulemaking, such as removing the references to the Level 2 summary
level in Sec. Sec. 351.503 and 351.701.
---------------------------------------------------------------------------
<bullet> 0 for a Level 1 (Unacceptable) summary level.
Agencies will list competing employees on the retention register in
descending order (within the same tenure group) based on each
employee's performance credit, which is the sum of the values assigned
for their three most recent ratings of record received during the 4-
year period prior to the issuance of RIF notices. OPM believes listing
employees in descending order (i.e., highest to lowest) based on their
total summary level rating for three most recent ratings of record is
the most objective methodology for these purposes and best implements
the principle of emphasizing performance over length of service.
Employees would then receive additional performance credit based on
veteran status: each preference eligible veteran with a compensable
service-connected disability of 30 percent or more receives an
additional 5 points added to their total performance credit, while
every other preference eligible veteran would then receive an
additional 3 points added to their total performance credit.
For example, the employees below are covered under a pattern H
five-summary level rating performance appraisal system as described in
5 CFR 430.208(d). Their ratings and totals are:
[GRAPHIC] [TIFF OMITTED] TP05MR26.000
These employees would be listed on the retention register in the
following order: Alice, Fred, Carol, then Bill.
Proposed Sec. 351.503(b) Ratings used establishes which ratings of
record may be used as the basis for calculating an employee's
performance credit. For most employees, an employee's ratings of record
are those recorded pursuant to subpart B of 5 CFR part 430. This
paragraph also explains how an agency determines an employee's
performance credit for RIF purposes for employees not covered under
subpart B of 5 CFR part 430 and in other special circumstances.
Paragraph (b) of Sec. 351.503 remains largely unchanged from the
provisions currently in Sec. 351.504(a)(1)-(3), though we are removing
the reference to `additional retention service credit' currently found
in Sec. 351.504(a)(1).
Proposed Sec. 351.503(c) Consideration of performance includes
language currently in Sec. 351.504(b) but modifies this language by
removing the reference to ``additional retention service credit''
(i.e., credit for performance will no longer be added to an employee's
length of service). Performance will now be the primary basis for
rating employees within each tenure group. Performance will be measured
based on performance credit, i.e., the total of each employee's summary
level ratings for the employee's three most recent ratings of record
for performance consistent with Sec. 351.503(a), which would then be
augmented by additional credit for veterans' preference status as set
forth in proposed Sec. 351.504. Proposed Sec. 351.503(c)(1) removes
the reference to `awarding additional retention service credit'
currently found in Sec. 351.504(b)(4).
New paragraph Sec. 351.503(d) Single rating pattern describes how
agencies list employees who have been covered under the same rating
pattern of summary levels during the 4-year period prior to the date of
issuance of the reduction in force notice or the agency-established
cutoff date. Paragraph (d) proposes that, for employees covered under a
summary level appraisal system in which the highest summary level is a
level ``3'' rating (i.e., a pattern A (`pass/fail'), or pattern D
system), the agency may, in its sole and exclusive discretion, give
additional credit for employees who have documented exceptional
performance to give more weight to certain performance-related actions
than others for purposes of listing some level ``3'' employees ahead of
other employees on a retention register. This paragraph explains that
evidence of exceptional performance may include documentation showing
an agency has awarded: an employee with the highest Agency or
Departmental award (such as a Secretary's or Chairman's award), a
special act or service award, a quality step increase (QSI), or other
performance awards or bonuses (e.g., a ``time-off' award for
demonstrated performance above expectations). OPM is proposing this
change to support the elevation of performance over tenure and length
of service and to provide a method by which an agency may make
meaningful distinctions among employees in a pattern A or D performance
appraisal program (i.e., the highest summary level rating is a ``3'' or
satisfactory) who have documented performance above expectations in
these appraisals systems.
For example, an agency could, instead of assigning a value of
``3'', assign a value of ``7'' for all employees who received the
agency's highest sustained performance award in a particular year, a
value of ``5'' for all employees who received an organizational or
component-specific award in a particular year, and a value of ``4'' for
all employees who received a time off award. An agency that chooses
this option must specify and document, in advance of any RIF, how it
will
[[Page 10914]]
prioritize performance awards for these purposes. OPM believes this
option is consistent with the principle of elevating performance over
tenure and length of service, and that it provides an agency with a
method for making meaningful distinctions among employees with a fully
successful rating when some of these employees were recognized for
exceptional performance.
For example, the employees below are covered under a three-summary
level pattern as described in 5 CFR 430.208(d). Their agency has an
established policy of providing enhanced performance credit by
assigning 7 points for agency awards, 5 points for organizational
awards, and 4 points for various performance awards. (An agency award
is designated by ``A''; a component-level award is designated by ``O'';
and a performance award or QSI is designated by ``P''.) Their ratings
and totals are:
[GRAPHIC] [TIFF OMITTED] TP05MR26.001
New paragraph Sec. 351.503(e) Multiple rating patterns addresses
situations in which an agency has employees in a competitive area who
have ratings of record under more than one pattern of summary levels,
as described in 5 CFR 430.208(d). This paragraph explains that an
agency may, in its sole and exclusive discretion, choose to provide
enhanced performance credit to employees under disparate pattern
summary levels under certain circumstances. To do this OPM is proposing
that an agency may transmute or assign an employee a higher summary
level rating than what he or she received under a previous rating
system only when there is documented evidence of exceptional or higher-
level performance consistent with the criteria in proposed Sec.
351.503(d). If an agency chooses to recognize higher-level performance
in this way, it must transmute the rating of an employee who meets this
requirement to the highest summary level of the pattern summary level
being used during the RIF (i.e., a level ``4'' rating if the agency
conducting the RIF uses a pattern C or G summary level appraisal
system, or a level ``5'' rating if the agency uses a pattern B, E, F,
or H summary level appraisal system). Documented evidence of
exceptional or higher-level performance for these purposes includes
award or receipt of the highest Agency or Departmental award (such as a
Secretary's or Chairman's award), a quality step increase, or an annual
performance appraisal bonus. For example, an employee was covered by a
pattern A (pass/fail) appraisal program for two years and a pattern H
(5 summary level) appraisal program for the one year prior to a RIF.
While covered under the pattern A appraisal program the employee
received his agency's highest award for excellent performance in the
second year. Under the five-summary level system he received a level
``4'' rating. Under this proposal the agency must assign the employee a
higher rating level; so, in this instance, the employee's performance
ratings for the three-year period would be 3/5/4 (his level 3 rating
for the second year would be transmuted to a level 5) and his
performance credit for the three-year period would be 15 for purposes
of Sec. 351.503(a).
OPM is also proposing that, where an employee who goes from an
appraisal system which uses a higher pattern of summary levels to a
lower one (e.g., an employee who goes from a 5 summary level appraisal
program to two level system (i.e., pass/fail system)), an agency may
adopt policies which would allow employees with ratings above the
highest summary level of the lower pattern system to be listed ahead of
any employee on the retention register who does not have documented
evidence of exceptional performance as described above.
Lastly, this proposed section requires an agency that seeks to
recognize outstanding performance in this way in conducting a RIF to
(1) specify the basis on which it will consider exceptional or higher-
level performance as described in Sec. 351.503(d) and transmute or
assign an employee a higher rating in accordance with the pattern of
summary level used during the RIF, (2) make this information readily
available for review prior to running a reduction in force, and (3)
apply this criteria consistently to all competing employees. OPM is
proposing to allow agencies to provide enhanced performance credit to
competing employees in this manner in order to implement the policy
that an agency emphasize performance over tenure and length of service
in a RIF. OPM recognizes that performance awards should be used by
agencies to reward high performers and that managers and supervisors
are expected to make decisions regarding award determinations
consistent with the applicable regulations and agency polices. This
method allows agencies to adopt policies that would prevent exceptional
performers from being disadvantaged because they may be covered under
two or more patterns of summary rating levels which may not make
meaningful distinctions for performance among employees. However, OPM
is not requiring agencies to adopt such policies. OPM believes that
agencies may reasonably choose to prioritize administrability in
determining an employee's performance credit, instead of seeking to
award
[[Page 10915]]
additional performance credit in this manner.
Paragraph (f) Missing ratings of Sec. 351.503 describes how an
agency should factor performance ratings into the RIF process when an
employee does not have three actual ratings of record during the 4-year
period prior to the date of issuance of RIF notices, or the 4-year
period prior to the agency-established cut-off date. Proposed Sec.
351.503(f) uses the modal rating concept for employees with no ratings
during the 4-year period prior to the RIF, as currently found in Sec.
351.504(c)(1), but modifies the current provisions by removing the
reference to ``additional retention service credit'' consistent with
the aim of E.O. 13839 (i.e., credit for performance will no longer be
added to an employee's length of service). The term `modal rating' is
currently defined in Sec. 351.203 and would remain unchanged. For
employees with at least one rating of record but less than three, this
section proposes that an agency total the performance credit for each
summary level for the ratings that exist, divide by the number of
ratings, and use this value for the missing ratings. For example, an
employee in five-level pattern H summary level appraisal system has
summary level rating of ``3'' fully successful and ``4'' exceeds fully
successful but is missing a third rating. The agency would add 3 + 5,
then divide by 2, for a value of 4 to represent the performance credit
for the missing rating. The agency then adds the performance credit for
each of the three ratings of record: 3, 5, and 4 for a total of 12 and
enters the employee on the retention register accordingly.
Proposed Sec. 351.504 Veterans' preference defines how veterans'
preference would be applied in a RIF in both the competitive and
excepted services. It gives effect to the requirements in 5 U.S.C.
3502(b) and (c) that veterans with compensable service-connected
disability receive retention preference ahead other veterans, and that
veterans receive retention preference ahead of other competing
employees in a RIF. Each preference eligible employee with a
compensable service-connected disability of 30 percent or more would
receive an additional 5 points added to their performance credit, while
every other preference eligible employee would receive an additional 3
points added to their performance credit. Non- preference eligible
employees do not receive any additional points added to their
performance score. The proposed rule also identifies veterans'
preference subgroups of AD for preference eligible employees with a
compensable service-connected disability of 30 percent or more;
subgroup A for other preference eligible employees; and subgroup B for
non-preference eligible employees.
Order of Retention Examples
The following examples illustrate and contrast the impact of
performance ratings of record and their summary levels on a retention
register under the current rules and the proposed rules. Consider the
following employees in a General Schedule (GS) 201-12 position:
[GRAPHIC] [TIFF OMITTED] TP05MR26.002
Example 1: Current Rules
Under the current rules, a retention register constructed in 2018
for these employees would look like this, based on retention factors
considered in this order: Tenure [verbar] Vets Pref [verbar] Adjusted
Service Computation Date (ASCD)--i.e., the service computation date
(SCD) adjusted for additional service credit (ASC) based on ratings of
record summary levels:
[[Page 10916]]
[GRAPHIC] [TIFF OMITTED] TP05MR26.003
Example 2: Proposed Rule
Under the proposed rule, the retention register for these same
competing employees would look like this, based on considering
retention factors in this order: Tenure, Performance based on the total
of the employee's summary levels augmented by Veterans' Preference, and
Service Computation Dates:
[GRAPHIC] [TIFF OMITTED] TP05MR26.004
Example 3: Proposed Rule
The following illustrates how veterans' preference and length of
service apply under the proposed rules. Assume the same group of
employees but with one difference: Emma receives additional performance
credit based on status as a veteran with a compensable service-
connected disability, as follows:
[[Page 10917]]
[GRAPHIC] [TIFF OMITTED] TP05MR26.005
Under the proposed rule, the retention register for these employees
would look like this, based on considering retention factors in this
order: Tenure [verbar] Performance based on the total of the employee's
summary levels [verbar] Vets Pref [verbar] Service Computation Date. In
this example Emma is listed ahead of Carl because she receives
additional performance credit as a veteran with a compensable service-
connected disability, despite being in the same tenure subgroup and
having less service credit than Carl.
[GRAPHIC] [TIFF OMITTED] TP05MR26.006
OPM is modifying proposed Sec. 351.506(c) to attune these
provisions with proposed changes in Sec. 351.505.
OPM is proposing to revise Sec. 351.507 to make clear that the
effective date of retention standing is measured as of the date the
employee receives a specific reduction in force notice, not the date a
RIF separation actually occurs. This will make it more administratively
feasible for agencies to conduct a RIF in instances where the actual
date of RIF separation is delayed due to litigation or other unforeseen
factors. Measuring retention standing as of the date of RIF separation
would require an agency to undergo the costly and time-consuming task
of re-running the retention register whenever a RIF separation is
delayed, without undermining merit or fairness.
Part 351, Subpart F
OPM is proposing to modify Sec. 351.601 for consistency with how
retention standing is to be calculated under Subpart E of part 351.
OPM proposes to modify Sec. 351.602 to remove the prohibition on
retaining an employee serving a specifically limited temporary
appointment in a competitive level while releasing a competing employee
from that level. OPM believes that agencies should have the flexibility
to retain or terminate a temporary employee without regard to RIF
procedures.
OPM is proposing to simplify and streamline its regulations in
Sec. 351.604 regarding furloughs of more than 30 consecutive calendar
days (or more than 22 workdays if done on a discontinuous basis over a
period not exceeding 1 year). The present regulations require agencies
to always furlough employees based on retention standing, and to always
recall employees to duty from furlough based on retention standing.
This means that agencies must presently undergo the time-consuming and
expensive process of building a retention register before conducting a
[[Page 10918]]
furlough or recalling employees from duty (unless all employees within
a competitive area are furloughed and then recalled back to duty at the
same time). OPM's experience is that the requirements imposed by Sec.
351.604 (including to build a retention register and recall employees
based on retention standing) means that agencies rarely use the
furlough procedures articulated in Sec. 351.604. This inhibits
agencies from using the furlough flexibility in cases where an agency
faces a funding shortfall or other exigency that might necessitate a
furlough, depriving agencies of a potentially useful option that would
allow agencies to temporarily furlough employees (either fully or
partially) for a set period of time, instead of separating them
entirely.
OPM proposes to allow agencies additional leeway to furlough
employees and recall employees from furlough. Instead of building a
retention register, agencies must communicate to competing employees,
in writing and in advance of the furlough, the criteria by which
employees will be furloughed and subsequently recalled to duty. In
determining which competing employees will be furloughed and the order
in which they will be recalled to duty, the agency's policy may
consider the agency's operational and mission needs, along with normal
retention factors like an employee's tenure group and subgroup; an
employee's performance as reflected in the employee's most recent
rating of record; veteran preference; and the employee's length of
service.
OPM is proposing to revamp and clarify Sec. 351.605 Liquidation
provision. The revised language relabels this section as Abolishment of
a competitive area to more accurately describe its purpose. The revised
language explains that the appropriate use of this provision is when an
agency is abolishing all positions (including the positions of
employees otherwise excluded from the provisions of part 351 under
Sec. 351.202(d)) in a competitive area within 180 days. Because all
positions in the competitive area will be eliminated, an agency will
not be required to release competing employees in order of retention
standing (i.e., in accordance with subparts E and F), as is currently
the case. Also, an agency would be required to apply the mandatory
exceptions under Sec. 351.603. And it may release employees at
different times by invoking the permissive temporary exceptions under
Sec. 351.608(c)-(f), as appropriate. Since employees are not being
ranked on a retention register, OPM proposes that agencies need not
provide notice to employees with higher retention standing under Sec.
351.603(a)(4) when invoking the permissive temporary exceptions under
Sec. 351.608(c)-(f). The revised section explains that an agency may
not use the assignment right provisions in subpart G because all
positions in the competitive area will be abolished. When using these
provisions an agency must follow Sec. 351.801, Notice period. In
addition, an agency is required to follow the provisions of Sec.
351.802(a)(1), (3), (5), (6) and (b) when applying Sec. 351.605. At a
minimum, an agency must provide any released employee with the
following: the action being taken and its effective date; the
competitive area being abolished; a link to 5 CFR part 351 and access
to the agency's records pertinent to the RIF being run to abolish the
competitive area; and the employee's appeal rights.\11\ In addition, in
compliance with 5 U.S.C. 3502(d)(2), the agency must provide a
statement that, because all positions in the competitive area are being
abolished pursuant to 5 CFR 351.605, the employee was not ranked
relative to other competing employees in the reduction in force. OPM
believes that requiring agencies to build a full retention register
when all positions in a competitive area are being abolished imposes
unnecessary costs and burdens on agencies (and ultimately the taxpayers
whose money funds those agencies), and that doing so is not required by
5 U.S.C. 3502.
---------------------------------------------------------------------------
\11\ See the subsequent discussion regarding a proposed change
to Sec. 351.802(a)(6) in a different rulemaking in the section
``Other Regulatory Changes.''
---------------------------------------------------------------------------
OPM proposes to modify Sec. 351.606(a) to clarify its meaning and
to align its provisions with other changes in this rulemaking. Under
this provision, an agency would be required to give retention priority
to a competing employee restored to duty following uniformed service
who is entitled to retention under Sec. 351.209(b) for either 6 months
or 1 year after reemployment. In addition, OPM proposes to modify Sec.
351.606(c) because employees released under Sec. 351.603 (where all
positions in a competitive area are being abolished in 180 days) no
longer must be released in order of retention standing.
OPM is proposing to modify and clarify current Sec. 351.607
Permissive continuing exceptions. OPM is relabeling this section as
Discretionary continuing exceptions to modernize this section with
other provisions in this chapter for which agency use is optional. OPM
is also adding explanatory language for the convenience of the reader.
This language explains that an agency may use this exception when
needed to retain an employee to avoid a lapse in a work activity that
cannot be performed by another employee within 90 days without undue
interruption that would otherwise occur if the employee was released on
the effective date of the RIF.
OPM is proposing to modify and clarify Sec. 351.608 Permissive
temporary exceptions. OPM proposes to rename this section Discretionary
temporary exceptions to modernize the section title consistent with
other provisions in this chapter for which agency use is optional. It
also creates new flexibilities for an agency to retain an employee past
the effective date of a RIF due to a government obligation. Proposed
Sec. 351.608(a) clarifies the purpose of this section and reflects
that the provisions of paragraph (a) apply to each of the exceptions
provided for in paragraphs (b)-(g). Current paragraph (g) of Sec.
351.608 would be moved to a new paragraph (a)(4).
Proposed Sec. 351.608(c) modifies the existing government
obligation provision to include examples of situations in which the
exception may be used, such as when an employee, or spouse of employee,
is pregnant on the effective date of a RIF or an employee has not used
all available paid parental leave to care for a recently born child or
a child recently placed with the employee for adoption purposes. This
paragraph proposes that an employee must sign a written agreement in
which the employee understands or attests to limitations established by
the agency and Sec. 351.608. OPM is proposing these changes to provide
agencies with additional flexibilities to recognize a Government
obligation, as newly defined in Sec. 351.203 to assist Federal
employees who otherwise would face a lapse or termination of their
Federal health insurance upon the effective date of a RIF.
Paragraph (d) of Sec. 351.608 would expand the existing exception
to allow employees with medical conditions or other circumstances that
would qualify for use of sick leave to use other appropriate leave
(paid or unpaid) or other paid time off in addition to sick leave,
subject to a 90-day cap and provided that the leave is used
continuously.
Proposed Sec. 351.608(e) labels this provision ``annual leave'' to
make clear the type of leave appropriate for an exception under this
paragraph, which has been expanded to include not only employees
covered by a Federal leave system under an authority other than 5
U.S.C. chapter 63 but also employees
[[Page 10919]]
covered by a retirement law not referenced in Sec. 351.606(b) or a
health benefits law other than 5 U.S.C. chapter 89.
The exception at the current Sec. 351.608(f) would be moved to
paragraph (g) with minor edits for consistency with the language
elsewhere in this section.
A new Sec. 351.608(f) establishes a temporary exception for
military spouses as defined in Sec. 351.203. An agency may retain an
eligible military spouse for up to 60 days beyond the effective date of
a RIF. OPM is proposing this action to further enhance the
Administration's on-going support for military spouses. On May 9, 2018,
the President signed Executive Order E.O. 13832 (83 FR 22343) to
``improve military spouse employment by enhancing job opportunities
within the Federal Government, expanding licensure portability, and
increasing remote and flexible job options that provide continuity and
financial stability for military spouses.'' In early 2025, the
President exempted military spouses from the return-to-office directive
for Federal civilian employees. In a May 9, 2025, proclamation honoring
Military Spouses the President noted that employment is a critical
challenge for military spouses. ``Military spouses face a 21 percent
unemployment rate--one of the highest demographics in the country--and
a 25 percent wage gap compared to their civilian counterparts.''
(Proclamation 10936, 90 FR 20359) This proposal provides an additional
flexibility for military spouses facing separation through a reduction
in force.
Part 351, Subpart G
Proposed Sec. 351.701(a) replaces tenure groups I and II with the
competitive service tenure group. In addition, OPM notes that it is
proposing in a separate rulemaking to remove the Level 2 summary
rating,\12\ and OPM would make conforming edits to part 351 based on
the changes finalized in that rulemaking, including removing the
references to the Level 2 summary rating in Sec. 351.701(a).
---------------------------------------------------------------------------
\12\ 91 FR 8780 (Feb. 24, 2026).
---------------------------------------------------------------------------
OPM proposes to consolidate Sec. 351.701(b) and (c). Based on the
new method of defining tenure groups and assigning retention standing
based on performance credit as augmented by veterans' preference, with
tenure subgroup and length of service as tiebreakers, subgroups would
no longer play a predominant role in determining retention standing,
and thus there is no longer a need for the separate concepts of an
employee ``bumping'' another employee in a lower subgroup, and
``retreating'' to the position of a lower-ranked employee in the same
subgroup. OPM proposes instead that a released employee be assigned to
a position held by another employee with lower retention standing in
the same tenure group, who is not more than three grades below the
position from which the employee was released, and for which the
released employee is qualified, pursuant the criteria set forth in
Sec. 351.702 and Sec. 351.703.
OPM proposes to eliminate Sec. 351.701(d) ``Limitation.'' This
provision meant to prohibit an employee with a current annual
performance rating of record of Level 2 or ``minimally successful''
from obtaining assignment to a position held by an employee with a
higher performance rating. However, with the new method of calculating
retention standing proposed in this rulemaking, which emphasizes
performance over length of service, OPM believes that this provision is
no longer necessary. Further, OPM is proposing to award no performance
credit for employees who have received a Level 2 rating (or
equivalent), further rendering this provision unnecessary. OPM also
recognizes that 5 U.S.C. 3502(b) and (c) requires that veterans'
preference in retention standing be awarded to preference eligibles
``whose performance has not been rated unacceptable under a performance
appraisal system implemented under chapter 43 of this title,'' and a
Level 2 rating under current OPM regulations is ``minimally
satisfactory,'' not ``unacceptable.'' Thus, this section is not
consistent with the new method of calculating retention standing, which
simplifies the process of determining assignment rights.
Proposed Sec. 351.702(a)(4), pertaining to qualifications for
assignment, is modified to include language clarifying that in
determining qualifications for reassignment an agency must use an
assessment that allows for demonstration of job-related skills,
abilities, knowledge, and competencies; is based on a job analysis; and
does not rely on a self-assessment from an automated examination.
Paragraph (a)(4) also provides examples of the types of assessments an
agency may use, which include: structured interviews; a work-related
exercise; a custom or generic procedure for measuring an employee's
employment or career-related qualifications and interests; a structured
resume review; or another assessment (such as a USA Hire assessment)
provided it demonstrates job-related technical skills, abilities and
knowledge, and is relevant for the position for which the assessment is
developed.\13\ OPM is conforming this section to 5 U.S.C. 3304.
---------------------------------------------------------------------------
\13\ OPM expects that agencies would administer these
assessments in accordance with applicable law, including providing
reasonable accommodations where legally required to do so based on
disability.
---------------------------------------------------------------------------
OPM is proposing to modify current Sec. 351.705 Administrative
assignment in alignment with the proposed changes to Sec. Sec.
351.501-351.505 and 351.701. Specifically, OPM is proposing to
eliminate references to optional agency flexibilities to allow
employees with lower retention standing to displace an employee with
higher standing in the same subgroup under certain circumstances. With
the more merit-based and straightforward order of retention proposed in
this rulemaking, OPM believes that there should no longer be a need for
these exceptions. OPM proposes to retain, and renumber, current Sec.
351.705(c), which provides that agencies may, at their discretion,
provide competing employees in the excepted service with assignment
rights to other positions under the same appointing authority on the
same basis as assignment rights provided to competitive service
employees under Sec. 351.701.
Part 351, Subpart H
OPM proposes to modify Sec. 351.802(a)(2) to substitute
``veterans' status'' for ``subgroup,'' and to add references to
notifying employees of their tenure group and subgroup. OPM proposes to
update language in Sec. 351.802(a)(3) by requiring agencies to provide
competing employees with a link to 5 CFR part 351 and access to the
agency's records pertinent to the RIF being run.
Part 316, Subpart I
OPM proposes to revise Sec. 316.911, which specifies how RIF
procedures apply to employees hired under the post-secondary student
hiring authority under 5 U.S.C. 3116 and part 316, subpart I, of this
chapter, to comport with the changes that part 351 that OPM is
elsewhere proposing.
Under the proposed revisions to part 351, it continues to be the
case that, as before, ``[s]tudents whose initial appointment was for a
period of 1 year or less are not assigned a tenure group and do not
compete with other employees in a RIF.'' However, students whose
initial appointment is for a period expected to last more than 1 year
would no longer be placed in tenure group III for purposes a RIF, as
OPM is
[[Page 10920]]
proposing to abolish tenure group III. Instead, under OPM's proposed
revisions to part 351, students whose initial appointment was for a
period expected to last more than 1 year are placed in the competitive
service tenure group for purposes of part 351 of this chapter only upon
completion of an initial probationary period.
Part 330, Subpart A
OPM proposes to change the ``definitions'' section of Sec. 330.101
to accommodate the modifications of tenure groups I, II and III
proposed elsewhere in this rulemaking. Specifically, OPM would
eliminate the definition of ``tenure groups'' and, in its place,
include the definition of the ``competitive service tenure group'' in 5
CFR 351.502(a). OPM also proposes to change the definition of
``permanent competitive service workforce'' and ``permanent competitive
service employees'' to encompass all employees serving under career or
career-conditional appointments in the competitive service tenure
group, no longer tenure groups I and II. OPM would modify the
definition of ``Agency'' to align with the definition of the same term
proposed in Sec. 351.203, to encompass all Executive agencies plus
GPO, but excluding GAO, on the ground that GPO has competitive service
employees and GAO does not.
The provisions of 5 CFR part 330 relating to the Reemployment
Priority List (RPL), Career Transition Assistance Program (CTAP) and
Interagency Career Transition Program (ICTAP) relate closely to RIFs,
as these programs are designed to assist employees who have been or are
about to be displaced by a RIF in finding continued Federal employment.
Unsurprisingly, the current regulations regarding these programs cross-
reference 5 CFR part 351 in several places. Thus, OPM believes it to be
appropriate to update its 5 CFR part 330 regulations so that
definitions and concepts align with similar definitions and concepts in
5 CFR part 351.
Part 330, Subpart B
OPM proposes to change the definition of ``qualified'' in Sec.
330.202 to align with OPM's definition of that same term in Sec.
351.702 (in the content of assignment rights in a RIF). To be qualified
for a position, an RPL registrant, just like an employee competing in a
RIF, would be required to have the capacity, adaptability, and special
skills necessary to satisfactorily perform the duties of the position
without undue interruption. And just like an employee competing in a
RIF, OPM proposes that such capacity, adaptability, and special skills
must be demonstrated through an assessment that allows for
demonstration of job-related skills, abilities, knowledge, and
competencies; is based on a job analysis; and does not solely include
or principally rely on a self-assessment of the candidate's own
abilities. As in Sec. 351.702, OPM proposes to provide acceptable
examples of such assessments. OPM is retaining the additional
requirement in Sec. 330.202 that, to be qualified for a position, an
RPL registrant must meet any other applicable requirements for
competitive service appointment, and it is providing a specific example
of such an additional requirement: that the RPL registrant meet
suitability requirements specified under part 731 of this chapter.
OPM also proposes to amend Sec. 330.203 to substitute ``the
competitive service tenure group'' for the previous terms ``tenure
group I or II.'' OPM understands that it is defining the term ``the
competitive service tenure group'' differently from how it previously
defined ``tenure group I or II''; in particular, it is excluding
employees who had been serving an initial probationary period from the
competitive service tenure group, where such employees had previously
been included in competitive service tenure group II.
It is OPM's intention that this change not be applied retroactively
to employees who are currently registered on the RPL. Therefore, it is
adding that employees who hold another qualifying competitive service
appointment, as determined by OPM, will be eligible for the RPL. OPM
intends by this provision to ensure that its definition of ``the
competitive service tenure group'' will not be applied retroactively to
disadvantage employees who previously received a RIF notice before the
effective date of the new rules, or who previously became eligible for
the RPL due to a qualifying injury or disability that predated the
effective date of the new rule.
OPM proposes to modify Sec. 330.206 to remove a reference to
tenure groups I and II and replace it with a reference to the
competitive service tenure group. OPM also proposes to modify Sec.
330.212(c), under the heading ``Agency flexibilities,'' to remove the
reference to RPL registrants having the capacity, adaptability, and
special skills needed to satisfactorily perform the duties and
responsibilities of the position, as determined by the agency. Instead
of being part of the criteria for modifying an OPM or OPM-approved
qualification standard, OPM is moving this provision so that it is part
of the definition of a ``qualified'' RPL applicant, so as to align the
definition of ``qualified'' in Sec. 351.702 with the definition of the
same term in Sec. 330.202. OPM additionally believes that the
reference to having ``the capacity, adaptability, and special skills
needed to satisfactorily perform the duties and responsibilities of the
position'' more appropriately describes what should be required of a
qualified applicant for a vacant position, as opposed to a criteria for
an exception from an OPM or OPM-approved qualification standard. OPM is
removing the reference to an RPL registrant having to meet any minimum
educational requirements for the position, notwithstanding an agency's
decision to modify a qualification standard, to give agencies more
flexibility in waiving educational requirements for RPL applicants.
This flexibility aligns with Executive Order 13932, Modernizing and
Reforming the Assessment and Hiring of Federal Job Candidates (June 26,
2020), which directs that Federal agencies prescribe minimum
educational requirements only where such qualifications are legally
required to perform the duties of the position in the State or locality
where those duties are to be performed. The only standard for modifying
an OPM or OPM-approved qualification standard, OPM believes, should be
that the exception is applied consistently and equitably.
In addition, OPM proposes to modify Sec. 330.213(b) to remove
references to tenure groups I and II and subgroups, both of which are
being modified by changes to Part 351. Instead, an agency using this
selection method must only place qualified RPL candidates in retention
standing order and may not pass over a candidate with a higher
retention standing to select a candidate with a lower retention
standing.
OPM proposes to modify Sec. 330.213(c), which prescribes a method
for selecting qualified RPL placement priority candidates based on
numerical scoring. Instead of rating and ranking candidates based on
job experience and education, OPM proposes that an agency using this
method must instead rate and rank candidates based on their job-related
skills, knowledge, and competencies as a measured by an assessment. The
assessment must be based on a job analysis, and agencies cannot rely
principally on a candidate's self-assessment of their own skills,
abilities, knowledge, and competencies. Agencies using the numerical
scoring method would be required to rate and rank qualified RPL
placement priority in a fair and consistent manner and would
[[Page 10921]]
be required to assign additional points to candidates based on
veterans' preference.
The changes to the numerical scoring method align with the Federal
government's move towards skills-based hiring, as measured by validated
assessments, and away from educational requirements. This process was
initiated by Executive Order 13932 that has continued with the Chance
to Compete Act of 2024 (Pub. L. 118-188), Executive Order 14170
(Reforming the Federal Hiring Process and Restoring Merit to Government
Service) of January 20, 2025, and the Merit Hiring Plan,\14\ each of
which require the government to move towards implementing technical and
alternative assessments to the maximum extent possible when
competitively selecting candidates for employment.
---------------------------------------------------------------------------
\14\ Assistant to the President for Domestic Policy & OPM, Merit
Hiring Plan (May 29, 2025), available at <a href="https://www.opm.gov/chcoc/latest-memos/merit-hiring-plan.pdf">https://www.opm.gov/chcoc/latest-memos/merit-hiring-plan.pdf</a>.
---------------------------------------------------------------------------
Part 330, Subpart D
OPM proposes to amend Sec. 330.404 to revise an outdated reference
to the ``Government Printing Office,'' and to substitute the term ``the
competitive service tenure group'' for ``tenure group I or I.''
Part 330, Subpart F
OPM proposes to amend the definitions section in Sec. 330.602
remove references to ``tenure group I or I'' and add in their place
``the competitive service tenure group'' in describing employees
eligible for CTAP. OPM does not intend this change to apply
retroactively so as to deprive employees who received a RIF separation
notice, declined a directed geographic reassignment, or received a
notice of expected separation before the effective date of the rule of
CTAP eligibility. OPM is therefore adding that an employee holding
another qualifying competitive service appointment, as determined by
OPM, would be CTAP eligible.
OPM proposes grammatical and formatting changes to the list in
Sec. 330.609 of permitted personnel actions that may be taken as an
exception to CTAP selection priority. It also proposes to add a new
permitted personnel action: to retain, or finalize the appointment of,
an employee serving a probationary or trial period pursuant to Civil
Service Rule 11.
Part 330, Subpart G
OPM proposes to amend the definitions section in Sec. 330.702 to
remove references to ``tenure group I or I'' and add in their place
``the competitive service tenure group'' in describing employees
eligible for ICTAP. OPM does not intend this change to apply
retroactively and so is adding that an employee holding another
qualifying competitive service appointment, as determined by OPM, would
be ICTAP eligible.
OPM proposes a grammatical revision to Sec. 330.705 to correct a
typo: an agency must not appoint any candidate from outside its
permanent competitive service workforce into a vacancy if there is a
qualified ITCAP selection priority candidate available for the vacancy,
unless an exception in Sec. 330.707 applies.
OPM proposes grammatical and formatting changes to the list in
Sec. 330.707 of permitted personnel actions that may be taken as an
exception to ICTAP selection priority. It also proposes to add a new
permitted personnel action: to retain, or finalize the appointment of,
an employee serving a probationary or trial period pursuant to Civil
Service Rule 11.
Part 353, Subpart C
OPM proposes to remove a reference to tenure group III in Sec.
353.301(a). Instead of ``tenure group III,'' OPM proposes to substitute
``term or indefinite appointment,'' which encompasses the categories
previously included in tenure group III.
Part 359, Subpart H
Consistent with the proposed changes to the definition of
``furlough'' in Sec. 351.203, OPM proposes to revise the definition of
``furlough'' in Sec. 359.802 (regulating furloughs in the SES) to
align with OPM's longstanding guidance that ``SES competitive furlough
requirements are not applicable to emergency shutdown furloughs because
the ultimate duration of an emergency shutdown furlough is unknown at
the outset and is dependent entirely on Congressional action, rather
than agency action.'' \15\
---------------------------------------------------------------------------
\15\ OPM, Guidance for Shutdown Furloughs, at pp. 44-45 (revised
September 2025), available at <a href="http://opm.gov/policy-data-oversight/pay-leave/reference-materials/guidance-for-shutdown-furloughs-sep-28-2025/">opm.gov/policy-data-oversight/pay-leave/reference-materials/guidance-for-shutdown-furloughs-sep-28-2025/</a>; OPM, Answers to Frequently Asked Funding Lapse Questions, at
p. 2 (Jan. 18, 2019), available at <a href="https://www.opm.gov/chcoc/transmittals/2019/answers-frequently-asked-funding-lapse-questions_508.pdf">https://www.opm.gov/chcoc/transmittals/2019/answers-frequently-asked-funding-lapse-questions_508.pdf</a>.
---------------------------------------------------------------------------
Part 362, Subpart B
OPM proposes to modify Sec. 362.205 of its regulations regarding
the Pathways Program by removing references to how RIF procedures apply
to Pathways interns, as those references would no longer be accurate or
necessary given OPM's proposed changes to Part 351. Pursuant to
proposed Sec. 351.502(b), the termination of a Pathways intern would
only be covered by RIF procedures if the intern had completed a trial
period under 5 CFR 11.3. Otherwise, Pathways interns could be retained
or separated by an agency without regard to RIF procedures.
Other Regulatory Changes
OPM notes that it is engaged in three additional rulemakings that
include proposals to modify 5 CFR part 351. Reduction in Force Appeals
(RIN 3206-AO99) would amend subpart I, which this rulemaking does not
address.\16\ Managing Senior Professional Performance (RIN 3206-AO88)
amends part 430, to which this rulemaking makes numerous
references.\17\ Both RIN 3206-AO88 and this rulemaking involve the
movement and renumbering of provisions. OPM proposes to make conforming
edits to parts 351 and 430 to ensure that cross-references are
maintained. For example, senior professionals are currently subject to
the performance appraisal regulations in subpart B of part 430, which
are referenced in part 351. If RIN 3206-AO88 were finalized as
proposed, part 351 would need to be revised to reflect that the
relevant performance appraisal regulations are in both subpart B and
subpart E of part 430.
---------------------------------------------------------------------------
\16\ 91 FR 5861 (Feb. 10, 2026).
\17\ 91 FR 8763 (Feb. 24, 2026).
---------------------------------------------------------------------------
OPM is also proposing to modify Sec. 430.208(d) to remove the
current reference to assigning additional retention service credit to
align this provision with the proposed changes in 5 CFR part 351.
Paragraph (d)(5) of Sec. 430.208 would be revised to remove the
reference to ``the number of years of additional retention service
credit'' and replace it with a general reference to proposed Sec.
351.503 Performance.
In the third rulemaking, Performance Appraisal for General
Schedule, Prevailing Rate, and Certain Other Employees (RIN 3206-AP06),
OPM has also proposed amendments to part 430.\18\ In this RIF rule, OPM
proposes to make appropriate conforming changes to part 351 following
the finalization of that rule. Based on the current language, OPM would
make conforming changes to proposed 5 CFR 351.503 to adjust the
calculations for an employee's performance credit by removing Level 2
from the list of summary levels and removing references to summary
level patterns that would be eliminated under this rulemaking.
---------------------------------------------------------------------------
\18\ 91 FR 8780 (Feb. 24, 2026).
---------------------------------------------------------------------------
[[Page 10922]]
IV. Expected Impact of This Proposed Rule
A. Statement of Need
The proposed changes are needed because current RIF rules are
outdated and no longer address the needs of agencies in the twenty
first century. The current regulatory framework has been in place since
the middle of the twentieth century with few modifications since then.
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. These changes
promote the general principle that employees should be retained on the
basis of merit. The proposed changes incorporate this principle, which
will assist Federal agencies in retaining their best performing
employees when conducting RIF actions. Agency missions and the workers
they employ to carry out these missions have become more complex since
the mid-twentieth century when the current rules were developed. So
have the positions agencies seek to fill to meet these changing needs.
The skill sets of many existing positions have changed, and new
positions addressing rapidly evolving skills, such as those for
scientific and technical positions, have emerged. At the same time,
organizational structures within agencies have evolved. Moreso than
ever before, many organizations are characterized by multiple funding
sources, complex supervisory and oversight structures, and employees
serving on a variety of work schedules and under a number of different
hiring authorities. Competition to recruit the most in-demand talent
and then retain top performers possessing this talent has never been
tighter. Oftentimes, doing so comes at considerable agency investment
in recruiting and then developing this talent. The current RIF rules,
however, have not kept pace with these needs and changes.
The proposed rules would also allow agencies more flexibility in
moving functions internally without also reassigning employees, and in
furloughing employees. Current rules impose unnecessary burdens and
requirements and do not allow for the flexibility that many agencies
need.
B. Impact
OPM expects the impact of this proposed rule, once finalized, will
be a more efficient and more merit-based RIF process than is currently
the case. The proposed rule modernizes a number of existing provisions.
By prioritizing performance over tenure and length of service in a RIF
the proposed rule aims to increase in 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. This proposed change will increase the impact of merit
in the RIF process which currently prioritizes non-merit factors such
as tenure and length of service. OPM also believes that its changes to
the regulations governing the RPL, CTAP and ICTAP will similarly
enhance efficiency and merit in administering the selection priority
for employees who have been impacted by restructuring actions.
C. Costs
This proposed rule, once finalized and in effect, will affect RIFs
run by most Federal agencies--ranging from cabinet-level departments to
small independent agencies. OPM will provide updated guidance on
implementing this rulemaking in the form of frequently asked questions
and updates to OPM's workforce policy guidance, and the RIF landing
page. OPM estimates that this rulemaking will require individuals
employed by these agencies to modify RIF policies and procedures to
implement the rulemaking and train human resources (HR) practitioners
and hiring managers on its use. For this cost analysis, the assumed
average salary rate of Federal employees performing this work will be
the rate in 2025 for GS-14, step 5, from the Washington, DC, locality
pay table ($161,486 annual locality rate and $91.02 hourly locality
rate). We assume that the total dollar value of labor, which includes
wages, benefits, and overhead, is equal to 200 percent of the wage
rate, resulting in an assumed labor cost of $182.04 per hour.
To comply with the regulatory changes in this Notice of Proposed
Rulemaking, affected agencies will need to review the rule and update
their policies and procedures. We estimate that, in the first year
following publication of the final rule, doing so will require an
average of 300 hours of work by employees with an average hourly cost
of $143.76. This work would result in estimated costs in that first
year of implementation of about $43,128 per agency, and about
$3,450,240 in total Governmentwide. Some agencies may incur additional
costs to ensure they have staff with the necessary assessment
measurement expertise to use these proposed procedures.
We do not believe this rulemaking will substantially increase the
ongoing administrative costs to agencies (including the administrative
costs of using these new procedures and training new staff) because the
rulemaking modernizes existing procedures and processes.
D. Reliance Interests
OPM seeks comment on any reliance interests that could be impacted
by this rule and will address them with particularity in any final rule
that it issues.
E. Benefits
The proposed rules offer several positive improvements to the RIF
process. Agencies will benefit by having an increased ability to retain
their better-performing employees in a RIF. This outcome will help
agencies more effectively and efficiently meet their mission-critical
responsibilities in the aftermath of a RIF and thus provide a higher
level of service to the public than would otherwise be the case.
OPM expects that modernized rules will be less cumbersome and more
flexible than current rules in their application. The rule provides
agencies more flexibility in moving functions internally without also
reassigning employees, and in furloughing employees for more than 30
days.
OPM expects these rules will result in cost savings for an agency
running a RIF under part 351. These rules exclude individuals serving
probationary and trial periods from the coverage of RIF procedures,
along with competitive service tenure group and the excepted service
tenure group, plus two tenure subgroups, which OPM believes will
simplify and streamline RIF procedures. OPM is also modifying the
definition of competitive areas by providing agencies with more clarity
in recognizing competitive areas. Lastly, OPM is also modifying the
rules to give agencies greater flexibility when abolishing all
positions in a competitive area. The revised rules alleviate an agency
from having to compile a retention register and apply the assignment
rights (i.e., `bump and retreat') provisions and provide agencies with
more flexibility with respect to the content of employee notices when
an agency is abolishing all positions in a competitive area. OPM
believes the net effect of these changes will be fewer employees
competing during a RIF, which will reduce the overall resource burden
on the agency running the RIF.
A RIF is a complex operational endeavor comprised of several
phases, and actions within each phase. Preparing for and running a RIF
is oftentimes a protracted process which can last as long as 14 months
from
[[Page 10923]]
planning through completion. Two of the more time-consuming parts of
the RIF process occur during the notification and preparation phase
(this phase usually lasts 4-6 months). These parts include reviewing
employee position descriptions for accuracy, validating competitive
levels, verifying employee retention data (i.e., veterans' preference,
service computation dates, etc.), updating employee qualifications
data; and creating the RIF retention register from which employees will
be released. This rule impacts these steps by potentially reducing the
number of employees competing in a given competitive area. Under
current rules, we estimate the costs of these two steps to be (based on
a GS-14, step 5 in Washington, DC with an hourly rate (salary and
benefits cost) of $106/hour, rounded down to $100/hour for illustrative
purposes):
<bullet> employee data/record review, validation, and correction--
$20,000 based on 2 hours review time for a 100-person competitive area,
and
<bullet> retention register creation--$2,000 based on 20 hours for
a 100-person competitive area.
Procuring a vendor or shared-service provider may result in higher
costs to the agency running the RIF due to the price paid for the
vendor's or provider's specialized expertise in delivering these
services, something many agencies lack. Agencies will realize
significant savings with respect to these processes. The proposed
changes will result in significant time and cost savings to an agency
running a RIF under part 351.
The rule will also result in cost savings for agencies moving or
reassigning functions within the agency, as they will not have to
undergo cumbersome processes for identifying employees associated with
the function and then giving those employees the opportunity to be
reassigned within the agency. It will also result in cost savings for
agencies who choose to furlough employees for more than 30 consecutive
days, as they will no longer be required to do so strictly based on
retention standing.
F. Regulatory Alternatives
OPM considered several alternatives to the proposed rulemaking. One
option was to make no changes to the current reduction in force
regulations. OPM did not deem this to be a viable alternative. As
documented in the preamble, the current regulations do not address the
challenges facing many agencies in the twenty-first century. OPM
determined that it has an opportunity to revise these rules with the
aim of making the reduction in force process more efficient and
streamlined while providing agencies with greater flexibility to retain
its top performers by emphasizing performance over tenure and length of
employment.
Another alternative was to reissue the proposed rulemaking
published in the Federal Register on December 17, 2020 (85 FR 81839).
OPM determined this alternative was too narrow in scope based on
feedback from agencies that have attempted to conduct RIFs. Current
regulatory provisions are decades old and difficult, if not
inefficient, to apply, resulting in needless costs and delays that hurt
agencies, taxpayers, and employees. OPM also determined that the
current definition of excluded employees creates an inefficiency for
agencies to implement when preparing and working through retention
registers and release of employees. The current definition does not
include certain appointments and positions which are most likely to be
the first to be released (i.e., at the bottom of the retention
register), such as employees serving initial probationary periods or
trial periods, and employees serving temporary or time-limited
appointments of 1 year or less. OPM determined these and the other
changes proposed in this rule were needed to make reductions in force
less burdensome, more efficient, and better focused on assisting
agencies in retaining their top-performing employees.
G. Severability
OPM proposes that, if any of the provisions of this proposed rule
as finalized is held to be invalid or unenforceable by its terms, or as
applied to any person or circumstance, it shall be severable from its
respective section(s) and shall not affect the remainder thereof or the
application of the provision to other persons not similarly situated or
to other dissimilar circumstances. In enforcing civil service
protections and merit system principles, OPM will comply with all
applicable legal requirements.
V. Regulatory Compliance
1. Regulatory Review
OPM has examined the impact of this rule as required by Executive
Orders 12866 and 13563, which direct agencies to assess all costs and
benefits of available regulatory alternatives and, if regulation is
necessary, to select regulatory approaches that maximize net benefits
(including potential economic, environmental, public, health, and
safety effects, distributive impacts, and equity). A regulatory impact
analysis must be prepared for rules that have an annual effect on the
economy of $100 million or more or adversely affect in a material way
the economy, a sector of the economy, productivity, competition, jobs,
the environment, public health or safety, or State, local, or tribal
governments or communities. This rulemaking does not reach that
threshold but has otherwise been designated as a ``significant
regulatory action'' under section 3(f) of Executive Order 12866, as
supplemented by Executive Order 13563. This rulemaking is not expected
to be considered an Executive Order 14192 regulatory action because it
imposes no more than de minimis costs.
2. Regulatory Flexibility Act
The Director of the Office of Personnel Management certifies that
this rule will not have a significant economic impact on a substantial
number of small entities because it only affects Federal agencies and
employees.
3. Federalism
We have examined this rule in accordance with Executive Order
13132, Federalism, and have determined that this rule will not have any
negative impact on the rights, roles and responsibilities of State,
local, or tribal governments.
4. Civil Justice Reform
This regulation meets the applicable standard set forth in
Executive Order 12988.
5. Unfunded Mandates Reform Act of 1995
This rule will not result in the expenditure by state, local, and
tribal governments, in the aggregate, or by the private sector, of $100
million or more in any year and it will not significantly or uniquely
affect small governments. Therefore, no actions were deemed necessary
under the provisions of the Unfunded Mandates Reform Act of 1995.
6. Paperwork Reduction Act
This regulatory action will not impose any additional reporting or
recordkeeping requirements under the Paperwork Reduction Act, as
amended (44 U.S.C. Chapter 35).
List of Subjects
5 CFR Part 316
Employment, Government employees.
5 CFR Part 330
Administrative practice and procedure, Armed forces reserves,
District of Columbia, Government employees.
[[Page 10924]]
5 CFR Part 351
Administrative practice and procedure, Government employees.
5 CFR Part 353
Administrative practice and procedure, Government employees.
5 CFR Part 362
Administrative practice and procedure, Colleges and universities,
Government employees.
5 CFR Part 430
Decorations, Government employees.
Signing Statement
The Director of OPM, Scott Kupor, reviewed and approved this
document and has authorized the undersigned to electronically sign and
submit this document to the Office of the Federal Register for
publication.
Office of Personnel Management.
Jerson Matias,
Federal Register Liaison.
Accordingly, for the reasons stated in the preamble, OPM proposes
to amend 5 CFR parts 316, 330, 351, 353, 359, 362, and 430 as follows:
PART 316--TEMPORARY AND TERM EMPLOYMENT
0
1. The authority citation for part 316 continues to read as follows:
Authority: 5 U.S.C. 3301, 3302; E.O. 10577, 19 FR 7521, 3 CFR,
1954-1958 Comp., p. 218; E.O. 14284, 90 FR 17729; 5 CFR 2.2(c).
Subpart I--Hiring Authority for Post-Secondary Students
0
2. Revise Sec. 316.911 to read as follows:
Sec. 316.911 Reduction in force.
Post-secondary students are covered by part 351 of this chapter for
purposes of a reduction in force (RIF) as follows:
(a) Students whose initial appointment was for a period of 1 year
or less are not assigned a tenure group and do not compete with other
employees in a RIF.
(b) Students whose initial appointment was for a period expected to
last more than 1 year are placed in the competitive service tenure
group for purposes of part 351 of this chapter upon completion of an
initial probationary period.
PART 330--RECRUITMENT, SELECTION, AND PLACEMENT (GENERAL)
0
3. The authority citation for part 330 is revised to read as follows:
Authority: 5 U.S.C. 1104, 1302, 3301, 3302, 3304, and 3330.
E.O. 10577, 19 FR 7521, 3 CFR, 1954-58 Comp., p. 218.
Section 330.103 also issued under 5 U.S.C. 3327.
Section 330.104 also issued under sec. 2(d), Pub. L. 114-137,
130 Stat. 312 (5 U.S.C. 3318 note).
Subpart B also issued under 5 U.S.C. 3315 and 8151.
Section 330.401 also issued under 5 U.S.C. 3310.
Subparts F and G also issued under Presidential Memorandum on
Career Transition Assistance for Federal Employees, September 12,
1995.
Section 330.609 also issued under 5 U.S.C. 3115.
Subpart G also issued under 5 U.S.C. 8337(h) and 8456(b).
Section 330.707 also issued under 5 U.S.C. 3115 and 3116.
Section 330.1301 also issued under 5 U.S.C. 9201-9206; sec.
1122(b)(1), Public Law 116-92, 133 Stat. 1607 (5 U.S.C. 9201 note).
Subpart A--Filling Vacancies in the Competitive Service
0
4. Amend Sec. 330.101 in paragraph (a) by:
0
a. Revising the definitions of ``Agency'';
0
b. Adding, in alphabetic order, a definition of ``Competitive service
tenure group'';
0
c. Revising the definitions of ``Permanent competitive service
workforce and permanent competitive service employee''; and
0
d. Removing the definition of ``Tenure groups''.
The addition and revisions read as follows:
Sec. 330.101 Definitions.
(a) * * *
Agency means an Executive agency as defined in 5 U.S.C. 105, along
with the Government Publishing Office, but does not include the
Government Accountability Office.
Competitive service tenure group has the meaning given that term in
Sec. 351.203 of this chapter.
* * * * *
Permanent competitive service workforce and permanent competitive
service employees mean agency employees serving under career or career-
conditional appointments in the competitive service tenure group.
* * * * *
Subpart B--Reemployment Priority List (RPL)
0
5. Amend Sec. 330.202 in the definition of ``Qualified'' by:
0
a. Removing the word ``and'' at the end of paragraph (4);
0
b. Revising paragraph (5); and
0
c. Adding paragraph (6).
The revision and addition read as follows:
Sec. 330.202 Definitions.
* * * * *
Qualified * * *
(5) Has the capacity, adaptability, and special skills needed to
satisfactorily perform the duties and responsibilities of the position.
In determining these qualifications an agency must use an assessment
that:
(i) Allows for demonstration of job-related skills, abilities,
knowledge, and competencies;
(ii) Is based on a job analysis; and
(iii) Does not solely include or principally rely on a self-
assessment from an automated examination.
(iv) Acceptable examples of the types of assessments include:
structured interviews; a work-related exercise; a custom or generic
procedure for measuring an employee's employment or career-related
qualifications and interests; a structured resume review; or another
assessment provided:
(A) It demonstrates job-related technical skills, abilities and
knowledge; and
(B) Is relevant for the position for which the assessment is
developed; and
(6) Meets any other applicable requirements for competitive service
appointment (including employment suitability requirements under part
731 of this chapter).
* * * * *
0
6. Amend Sec. 330.203 by revising paragraphs (a)(1) and (b)(1) to read
as follows:
Sec. 330.203 RPL Eligibility.
* * * * *
(a) * * *
(1) Must be serving in an appointment in the competitive service in
the competitive service tenure group (or another qualifying competitive
service appointment, as determined by OPM);
* * * * *
(b) * * *
(1) Must be serving in, or separated from, an appointment in the
competitive service in the competitive service tenure group (or another
qualifying competitive service appointment, as determined by OPM);
* * * * *
0
7. Amend Sec. 330.206 by revising paragraph (b)(1) to read as follows:
Sec. 330.206 RPL registration timeframe and positions.
* * * * *
(b) * * *
(1) Have a representative rate no higher than the position from
which
[[Page 10925]]
they were, or will be, separated unless the eligible was demoted in a
previous RIF. If the eligible was so demoted as a competitive service
tenure group employee in a previous RIF, the eligible can register for
positions with a representative rate up to the representative rate of
the position held on a permanent appointment immediately before the RIF
demotion was effective;
* * * * *
0
8. Amend Sec. 330.212 by revising paragraph (c)(1) to read as follows:
Sec. 330.212 Agency flexibilities.
* * * * *
(c)(1) Modify the OPM or OPM-approved qualification standard used
to determine if an RPL eligible is qualified for a position, provided
the exception is applied consistently and equitably in filling a
position.
* * * * *
0
9. Amend Sec. 330.213 by revising paragraphs (b) and (c)(1) to read as
follows:
Sec. 330.213 Selection from an RPL.
* * * * *
(b) Retention standing order. For each vacancy to be filled, the
agency places qualified RPL placement priority candidates in order of
retention standing in accordance with part 351 of this chapter. In
making a selection, an agency may not pass over a candidate with a
higher retention standing to select a candidate with lower retention
standing.
(c) * * *
(1) For each vacancy to be filled, the agency rates RPL placement
priority candidates according to their job-related skills, abilities,
knowledge, and competencies, as measured by an assessment that does not
principally rely on a self-assessment from an automated examination.
The assessment must be based on a job analysis, and the agency must
rate and rank RPL placement priority candidates in a fair and
consistent manner. The agency assigns the candidates a numerical score
of at least 70 on a scale of 100, based on the evaluation criteria
developed under this paragraph. The agency must grant 5 additional
points to veterans' preference eligibles under 5 U.S.C. 2108(3)(A) and
(B), and 10 additional points to veterans' preference eligibles under 5
U.S.C. 2108(3)(C) through (G).
* * * * *
Subpart D--Positions Restricted to Preference Eligibles
0
10. Revise Sec. 330.404 to read as follows:
Sec. 330.404 Displacement of preference eligibles occupying
restricted positions in contracting out situations.
An individual agency and OPM both have additional responsibilities
when the agency decides, in accordance with the Office of Management
and Budget (OMB) Circular A-76, to contract out the work of a
preference eligible who holds a restricted position. These additional
responsibilities as described in Sec. Sec. 330.405 and 330.406 are
applicable if a preference eligible holds a competitive service
position (other than in the Government Publishing Office) that is:
(a) A restricted position as designated in 5 U.S.C. 3310 and Sec.
330.401; and
(b) In the competitive service tenure group, as defined in Sec.
351.203 of this chapter.
Subpart F--Agency Career Transition Assistance Plan (CTAP) for
Local Surplus and Displaced Employees
0
11. Amend Sec. 330.602 by revising paragraph (1) introductory text of
the definition of ``Displaced'' and paragraph (1) of the definition of
``Surplus'' to read as follows:
Sec. 330.602 Definitions.
* * * * *
Displaced * * *
(1) A current competitive service employee in the competitive
service tenure group at grade GS-15 (or equivalent) or below (or
another qualifying competitive service appointment, as determined by
OPM) who:
* * * * *
Surplus * * *
(1) A current competitive service employee in the competitive
service tenure group at grade GS-15 (or equivalent) or below (or
another qualifying competitive service appointment, as determined by
OPM) who received a Certification of Expected Separation under part 351
of this chapter or other official agency certification or notification
indicating that the employee's position is surplus (for example, a
notice of position abolishment or a notice of eligibility for
discontinued service retirement).
* * * * *
0
12. Amend Sec. 330.609 by:
0
a. Revising paragraphs (e), (dd), and (ee);
0
b. Removing the period at the end of paragraph (ff) and adding a
semicolon in its place;
0
c. Revising paragraph (gg); and
0
d. Adding paragraph (hh).
The revisions and addition read as follows:
Sec. 330.609 Exceptions to CTAP selection priority.
* * * * *
(e) Convert an employee serving under an appointment that provides
noncompetitive conversion eligibility to a competitive service
appointment, including from:
(1) A Veterans Recruitment Appointment under part 307 of this
chapter;
(2) An appointment under 5 U.S.C. 3112 and part 316 of this chapter
of a veteran with a compensable service-connected disability of 30
percent or more;
(3) An excepted service appointment under part 213 of this chapter;
and
(4) A post-secondary student appointment under 5 U.S.C. 3116 and
part 316, subpart I, of this chapter;
* * * * *
(dd) Effect a transfer or a position change of an employee under
part 412 of this chapter;
(ee) Convert an employee's time-limited appointment in the
competitive or excepted service to a permanent appointment in the
competitive service if the employee accepted the time-limited
appointment while a CTAP eligible;
* * * * *
(gg) Make an appointment using the post-secondary student hiring
authority under 5 U.S.C. 3116 and part 316, subpart I, of this chapter;
or
(hh) Retain, or finalize the appointment of, an employee serving a
probationary or trial period pursuant to Civil Service Rule 11.
Subpart G--Interagency Career Transition Assistance Plan (ICTAP)
for Displaced Employees
0
13. Amend Sec. 330.702 in the definition of ``Displaced'' by revising
the introductory text of paragraph (1), the introductory text of
paragraph (2), and paragraph (4) to read as follows:
Sec. 330.702 Definitions.
* * * * *
Displaced * * *
(1) A current competitive service employee of any agency in the
competitive service tenure group at grade GS-15 (or equivalent) or
below (or another qualifying competitive service appointment, as
determined by OPM) whose current performance rating of record is at
least fully successful (Level 3) or equivalent and who:
* * * * *
(2) A former competitive service employee of any agency who was in
the competitive service tenure group at grade GS-15 (or equivalent) or
below (or
[[Page 10926]]
another qualifying competitive service appointment, as determined by
OPM), and whose last performance rating of record was at least fully
successful (Level 3) or equivalent who was either:
* * * * *
(4) A former competitive service employee of any agency who was in
the competitive service tenure group (or another qualifying competitive
service appointment, as determined by OPM) who retired with a
disability annuity under 5 U.S.C. 8337 or 8451 and who has received
notification from OPM that the disability annuity has been or will be
terminated.
* * * * *
0
14. Amend Sec. 330.705 by revising paragraph (a) to read as follows:
Sec. 330.705 Applying ICTAP selection priority.
(a) An agency must not appoint any candidate from outside its
permanent competitive service workforce into a vacancy if there is an
ICTAP selection priority candidate available for the vacancy, unless
the personnel action to be effected is an exception under Sec.
330.707.
* * * * *
0
15. Amend Sec. 330.707 by revising paragraphs (v) through (y) to read
as follows:
Sec. 330.707 Exceptions to ICTAP selection priority.
* * * * *
(v) Transfer or effect a position change of an employee under part
412 of this chapter;
(w) Retain, or finalize the appointment of, an employee serving a
probationary or trial period pursuant to Civil Service Rule 11;
(x) Make an appointment using the college graduate hiring authority
under 5 U.S.C. 3115 and part 315 of this chapter; or
(y) Make an appointment using the post-secondary student hiring
authority under 5 U.S.C. 3116 and part 316, subpart I, of this chapter.
PART 351--REDUCTION IN FORCE
0
16. Revise the authority citation for part 351 to read as follows:
Authority: 5 U.S.C. 1302, 3502, 3503; E.O. 14284, 90 FR 17729; 5
CFR 2.2(c). Sec. 351.801 also issued under E.O. 12828, 58 FR 2965, 3
CFR, 1993 Comp., p. 569.
Subpart B--General Provisions
0
17. Amend Sec. 351.201 by revising paragraph (a)(2) to read as
follows:
Sec. 351.201 Use of regulations.
(a) * * *
(2) Each agency shall follow this part when it releases a competing
employee from his or her competitive level by furlough for more than 30
days, separation, or demotion, or reassignment requiring displacement,
when the release is required because of lack of work; shortage of
funds; insufficient personnel ceiling; reorganization; or the exercise
of reemployment rights or restoration rights.
* * * * *
0
18. Amend Sec. 351.202 by:
0
a. Revising the introductory text of paragraph (b), the introductory
text of paragraph (c), and paragraph (c)(3); and
0
b. Adding paragraph (d).
The addition and revisions read as follows:
Sec. 351.202 Coverage.
* * * * *
(b) Employees exempted. This part does not apply to an employee:
* * * * *
(c) Actions exempted. This part does not apply to:
* * * * *
(3) A change to lower grade based on reclassification of an
employee's position due to erosion of duties, except that an agency
shall not undertake such a reclassification action between the time an
agency has formally announced a reduction in force in the employee's
competitive area and the completion of the reduction in force where
such the reclassification action would adversely affect an employee's
retention standing in the announced reduction in force.
* * * * *
(d) Employees excluded. The provisions of this part do not apply to
the following categories of employees:
(1) In the excepted service:
(i) An employee serving under a temporary or time-limited
appointment limited to 1 year or less;
(ii) An employee serving a trial period as of the date the agency
issues a specific reduction in force notice;
(iii) Schedule C appointments; and
(iv) Schedule G appointments.
(2) In the competitive service:
(i) Employees on indefinite appointments serving an initial
probationary period as of the date the agency issues a specific
reduction in force notice;
(ii) Career-conditional employees serving an initial probationary
period as of the date the agency issues a reduction in force notice;
and
(iii) An employee serving on a temporary or term appointment of 1
year or less under subpart C or D of part 316 of this chapter.
(3) An employee holding one of these appointments is not a
``competing employee'' for purposes of a reduction in force, and such
employees may be retained, furloughed, separated, demoted or reassigned
without regard to the provisions of this part.
0
19. Amend Sec. 351.203 by:
0
a. Adding a definition for ``Agency'' in alphabetical order;
0
b. Revising the definition of ``Competing employee'';
0
c. Adding a definition for ``Competitive service tenure group'' in
alphabetical order;
0
d. Revising the definition of ``Current rating of record'';
0
e. Adding a definition for ``Excepted service tenure group'' in
alphabetical order;
0
f. Revising the definition of ``Furlough'';
0
g. Adding definitions for ``Government obligation'', ``Initial
probationary period'', and ``Military spouse'' in alphabetical order;
0
h. Revising the definition of ``Rating of record'';
0
i. Adding a definition for ``Reduction in force'' in alphabetical
order;
0
j. Revising the definition of ``Transfer of function''; and
0
k. Adding a definition for ``Trial period'' in alphabetical order.
The additions and revisions read as follows:
Sec. 351.203 Definitions.
* * * * *
Agency means an Executive agency as defined in 5 U.S.C. 105, along
with the Government Publishing Office, but does not include the
Government Accountability Office.
Competing employee means an employee in the competitive service
tenure group or the excepted service tenure group.
Competitive service tenure group means all employees in competitive
service tenure subgroups I or II (as defined in Sec. 351.502).
Current rating of record is the rating of record for the most
recently completed appraisal period as provided in Sec. 351.503(c)(3).
* * * * *
Excepted service tenure group means all employees in excepted
service tenure subgroups I or II (as defined in Sec. 351.502).
* * * * *
Furlough means the placement of an employee in a temporary nonduty
and nonpay status for more than 30 consecutive calendar days, or more
than 22 workdays if done on a discontinuous basis over a period not
exceeding 1 year;
[[Page 10927]]
but it does not refer to an emergency shutdown furlough caused by a
lapse in congressional appropriations where the ultimate duration of
the furlough is not known by the agency at the outset of the furlough
and is instead dependent entirely on congressional action, rather than
agency action.
Government obligation means a legal or moral duty or action an
agency takes or may take towards a competing employee, whether the duty
is imposed by law, contract, promise, social relations, courtesy,
kindness, or morality. A Government obligation may include, for
example, retaining an employee to enable the employee to maintain and
utilize his or her health insurance during the pregnancy of the
employee or employee's spouse until the birth of a child or allowing an
employee to use available paid parental leave to care for a newly born
child or a child newly placed with the employee for adoption purposes.
Initial probationary period means the probationary period described
in Sec. 11.2 of this chapter and does not include the probationary
period applicable on initial appointment to a supervisory or managerial
position, as described in subpart I of part 315 of this chapter.
* * * * *
Military spouse has the meaning of a spouse of a member of the
armed forces or service member as defined in Sec. 315.612(b)(4)(i) of
this chapter.
* * * * *
Rating of record means the performance rating prepared at the end
of an appraisal period assessing performance of agency-assigned duties
over the entire period and the assignment of a summary level within a
pattern (as specified in Sec. 430.208(d)) of this chapter. For an
employee not subject to 5 U.S.C. chapter 43 or part 430 of this
chapter, it means the officially designated performance rating, as
provided for in the agency's appraisal system, that is considered to be
an equivalent rating of record under the provisions of Sec. 430.201(c)
of this chapter.
Reduction in force means the release of a competing employee from
his or her competitive level by furlough, separation, or demotion, or
reassignment requiring displacement, when the release is required
because of lack of work; shortage of funds; insufficient personnel
ceiling; reorganization; or the exercise of reemployment rights or
restoration rights.
* * * * *
Transfer of function means the transfer of the performance of a
continuing function from one agency to another agency, except when the
function involved is virtually identical to functions already being
performed in the other agency affected.
Trial period means the trial period described in Sec. 11.3 of this
chapter.
* * * * *
0
20. Revise Sec. 351.204 to read as follows:
Sec. 351.204 Responsibility of agency.
Each agency covered by this part is responsible for following and
applying the regulations in this part when the agency determines that a
reduction in force is necessary.
Subpart C--Transfer of Function
Sec. 351.301 [Amended]
0
21. Amend Sec. 351.301 by:
0
a. Removing the words ``competitive area'' wherever they appear and
adding, in their place, the word ``agency''; and
0
b. In paragraph (b), removing the text ``(i.e., in the gaining
competitive area, the function continues to be carried out by competing
employees rather than by noncompeting employees)''.
0
22. Revise Sec. 351.302 to read as follows:
Sec. 351.302 Transfer of employees.
(a) Before a reduction in force is made in connection with the
transfer of any or all of the functions of one agency to another
agency, each competing employee in a position identified with the
transferring function or functions must be transferred to the agency
gaining the function without any change in the tenure of his or her
employment.
(b) An employee whose position is transferred under this subpart
and who is identified with a function or functions that will be
terminated in the gaining agency within 60 days is not a competing
employee for other positions in the agency gaining the function or
functions and does not have a right to any continuing positions in the
agency gaining the function or functions.
(c) Regardless of an employee's personal preference, a competing
employee only has the right to transfer with his or her function when
the alternative in the agency losing the function is separation or
demotion.
(d) Except as permitted in paragraph (e) of this section, the
losing agency must use the adverse action procedures found in part 752
of this chapter if it chooses to separate a competing employee who
declines to transfer with his or her function.
(e) The losing agency may, at its discretion, include competing
employees who decline to transfer with their function in a concurrent
reduction in force.
(f) An agency may not separate a competing employee who declines to
transfer with the function any sooner than it transfers competing
employees who chose to transfer with the function to the gaining
agency.
(g) Agencies may ask employees whose positions are identified with
the transferring function pursuant to Sec. 351.303, via a canvass
letter, whether the employees prefer to transfer with the function when
the function transfers to a different agency. The canvass letter must
give the employee information regarding the consequences of accepting
the offer to transfer, and the consequences of declining the offer to
transfer. The agency may require an employee to respond to the canvass
letter within a set period of time but must give the employee at least
30 calendar days to consider the offer. The agency may treat a failure
to respond to the canvass letter as a declination of the offer to
transfer with the function, unless the employee establishes that the
failure to respond within the specified timeframe was due to
circumstances beyond the employee's control such as the employee not
receiving the letter or employee or family member illness.
0
23. Revise Sec. 351.303 to read as follows:
Sec. 351.303 Identification of positions with a transferring
function.
(a) The agency losing the function is responsible for identifying
the positions of competing employees with the transferring function. A
competing employee is identified with the transferring function on the
basis of the employee's official position.
(b) A competing employee is identified with a transferring function
if the agency determines that employee performs the function during at
least half of his or her work time.
(c) In determining what percentage of time an employee performs a
function in the employee's official position, the agency may supplement
the employee's official position description by the use of appropriate
records (e.g., work reports, organizational time logs, work schedules,
etc.) and information obtained from supervisors.
Subpart D--Scope of Competition
0
24. Amend Sec. 351.402 by revising paragraph (b) to read as follows:
Sec. 351.402 Competitive area.
* * * * *
(b)(1) Except as authorized in paragraph (b)(2) of this section, a
competitive area must be defined in
[[Page 10928]]
terms of the agency's organizational unit(s) and, except as provided in
paragraph (e) of this section, it must include all employees within the
competitive area so defined. A competitive area may consist of any
organizational unit or combination of units established on the agency's
official organizational chart. Organizational charts must be available
on the agency's public facing web page or otherwise appropriately
documented by the agency. An organizational unit for these purposes
must be designated/approved by the head of the agency, or designee, and
the designation or approval cannot be delegated to an official below
the agency's headquarters level. In addition, an organizational unit
for these purposes must be clearly distinguished from other
organizational units with regard to its operation, work function,
staff, and supervisory oversight.
(2) An agency may define a geographic location (e.g., a national
park or county) as a separate competitive area.
(3) Notwithstanding paragraph (b)(2) of this section, for the
purposes of defining a competitive area, an agency must assign
employees working at an approved alternate location to the
organizational unit to which they are officially assigned.
* * * * *
0
25. Revise subpart E to read as follows:
Subpart E--Retention Standing
Sec.
351.501 Order of retention.
351.502 Tenure of employment.
351.503 Performance.
351.504 Veterans' preference.
351.505 Length of service.
351.506 Records.
351.507 Effective date of retention standing.
Sec. 351.501 Order of retention.
When determining the order of retention in a reduction in force
under this part, an agency must classify competing employees on the
appropriate retention register on the basis of four factors (tenure of
employment, performance, veterans' preference, and length of service)
as follows:
(a) By tenure group, with the competitive service tenure group and
the excepted service tenure group listed on separate retention
registers;
(b) Within each tenure group, by performance credit in descending
order as determined in Sec. 351.503, as augmented by veterans'
preference as described in Sec. 351.504;
(c) When two or more competing employees have the same performance
credit, as augmented by veterans' preference as described in Sec.
351.504, the competing employees are further ranked in descending order
by tenure subgroups (as described in Sec. 351.502), with tenure
subgroup I listed ahead of tenure subgroup II, and then by years of
service beginning with the earliest service computation date, as
computed under Sec. 351.505.
Sec. 351.502 Tenure of employment.
(a) Competitive service. Tenure groups and subgroups in the
competitive service are defined as follows:
(1) The competitive service tenure group includes all employees in
competitive service tenure subgroups I or II.
(2) Competitive service tenure subgroup I includes each career
employee (as that term is used in part 315 of this chapter) in the
competitive service who, as of the date the agency issues a specific
reduction in force notice, is not serving an initial probationary
period. The following employees are in competitive service tenure
subgroup I as soon as the employee completes any required probationary
period for initial appointment:
(i) An employee for whom substantial evidence exists of eligibility
to acquire status and career tenure immediately, and whose case is
pending final resolution by OPM (including cases under Executive Order
10826 to correct certain administrative errors);
(ii) An employee who acquires competitive status and satisfies the
service requirement for career tenure when the employee's position is
brought into the competitive service;
(iii) An administrative law judge appointed prior to establishment
of excepted service schedule E and who remains in the competitive
service;
(iv) An employee appointed under 5 U.S.C. 3104, which provides for
the employment of specially-qualified scientific or professional
personnel, or a similar authority; and
(v) An employee who acquired status under 5 U.S.C. 3304(c) on
transfer to the competitive service from the legislative or judicial
branches of the Federal Government.
(3) Competitive service tenure subgroup II includes each employee
in the competitive service who, as of the date the agency issues a
specific reduction in force notice, is not in competitive service
tenure subgroup I and is not serving an initial probationary period or
a temporary or time-limited appointment of 1 year or less under subpart
C or D of part 316 of this chapter.
(b) Excepted service. Tenure groups and subgroups in the excepted
service are defined as follows:
(1) The excepted service tenure group includes all employees in
excepted service tenure subgroups I or II.
(2) Excepted service tenure subgroup I includes all employees
occupying a career position (as defined in part 213 of this chapter) in
the excepted service who, as of the date the agency issues a specific
reduction in force notice, are not serving a trial period and whose
appointment carries no restriction or condition such as conditional,
indefinite, or specific time limit.
(3) Excepted service tenure subgroup II includes all other
employees in the occupying a career position (as defined in part 213 of
this chapter) in the excepted service who, as of the date the agency
issues a specific reduction in force notice, are not serving a trial
period and who are not serving in a temporary or time-limited
appointment of 1 year or less.
Sec. 351.503 Performance.
(a) Calculation of performance credit. Determine each competing
employee's performance credit as follows:
(1) For each rating used, assign a numerical value as follows in
conjunction with the patterns of summary level in Sec. 430.208(d) of
this chapter: 7 for a Level 5 (Outstanding or equivalent) summary
level, 5 for a Level 4 (Exceeds Fully Successful or equivalent) summary
level, 3 for a Level 3 (Fully Successful or equivalent) summary level,
0 for a Level 2 (Minimally Successful or equivalent) summary level, 0
for a Level 1 (Unacceptable) summary level.
(2) Sum the values assigned for each rating.
(b) Ratings used. (1) Subject to paragraph (c)(3) of this section,
only ratings of record may be used as the basis for classifying an
employee's performance in a reduction in force.
(2) For competing employees who received ratings of record while
covered by part 430, subpart B, of this chapter, the summary levels
assigned for those ratings of record must be used to establish the
employee's performance credit in a reduction in force in accordance
with Sec. 351.501 (as augmented by veterans' preference in accordance
with Sec. 351.504).
(3) For competing employees who received performance ratings while
not covered by the provisions of 5 U.S.C. chapter 43 and subpart B of
part 430 of this chapter, those performance ratings must be considered
ratings of record with summary levels for designating an employee's
performance credit in a
[[Page 10929]]
reduction in force only when the agency conducting the reduction in
force determines, in its sole discretion, that those performance
ratings are equivalent ratings of record under the provisions of Sec.
430.201(c) of this chapter.
(c) Consideration of performance. (1) A competing employee's
entitlement to performance consideration under this subpart must be
based on the employee's three most recent summary level ratings of
record received during the 4-year period prior to the date of issuance
of reduction in force notices, except as otherwise provided in this
section.
(2) To provide adequate time to determine employee performance
credit, an agency may provide for a cutoff date, a specified number of
days prior to the issuance of reduction in force notices after which no
new ratings of record will be put on record and used for purposes of
this subpart. When a cutoff date is used, an employee's performance
credit will be based on the three most recent ratings of record
received during the 4-year period prior to the cutoff date.
(3) To be considered for purposes of this subpart, a rating of
record and its assigned summary level (including any adjustments to
performance consistent with this subpart) must have been issued to the
employee, with all appropriate reviews and signatures, and must also be
on record (i.e., the rating of record is available for use by the
office responsible for establishing retention registers).
(4) The use of performance ratings of record and assigned summary
levels (including any adjustments to performance) for purposes of this
subpart must be uniformly and consistently applied within a competitive
area, and must be consistent with an agency's' appropriate issuance(s)
that implement this part. Each agency must specify in its appropriate
issuance(s):
(i) The conditions under which a rating of record is considered to
have been received for purposes of determining whether it is within the
4-year period prior to either the date the agency issues reduction in
force notices or the agency-established cutoff date for ratings of
record, as appropriate; and
(ii) If the agency elects to use a cutoff date, the number of days
prior to the issuance of reduction in force notices after which no new
ratings of record will be put on record and used for purposes of this
subpart.
(d) Single rating pattern. If all competing employees in a
reduction in force competitive area have received ratings of record
under a single pattern of summary levels as set forth in Sec.
430.208(d) of this chapter, an agency must calculate performance credit
as described in paragraph (a) of this section, except that an agency
may, in its sole and exclusive discretion, assign additional points for
performance for employees covered under a summary level appraisal
system in which the highest summary level is a level ``3'' rating
(i.e., a pattern A `pass/fail', or pattern D system), subject to the
following limitations:
(1) An agency may, in its sole and exclusive discretion, assign
additional points to level ``3'' employees with demonstrated
exceptional performance if, within the 4-year period prior to either
the date the agency issues reduction in force notices or the agency-
established cutoff date for ratings of record, the agency has applied
performance-related criteria and taken an action that recognizes the
employee's exceptional performance. Such actions may include awarding
an employee: the highest Agency or Departmental award (such as a
Secretary's or Chairman's award), a special act or service award, a
quality step increase, or other performance awards or bonuses (e.g., a
`time-off' for demonstrated performance above expectations).
(2) An agency may determine, in its sole and exclusive discretion,
whether to give more weight to the performance-related action(s)
described in paragraph (d)(1) of this section for purpose of
differentiating performance on a retention register. Points may be
added to the value assigned for the rating of record on an annual basis
or as a single addition to the calculated performance credit.
(3) An agency that chooses to assign additional credit for
performance must specify and document, in advance of the reduction in
force, how it will prioritize performance awards for these purposes and
make this criterion readily available for review.
(e) Multiple rating patterns. (1) If an agency has employees in a
competitive area who have ratings of record under more than one pattern
of summary levels, as set forth in Sec. 430.208(d) of this chapter, it
may, in its sole and exclusive discretion, elect to provide additional
retention credit for performance in accordance with the following:
(i) An agency may transmute or assign an employee a higher summary
level rating than what he or she received under their previous
appraisal system only when there is documented evidence of exceptional
or higher level performance as evidenced by an employee who received
the highest Agency or Departmental award (such as a Secretary's or
Chairman's award), a quality step increase, or appraisal performance
awards or bonuses (e.g., a ``time-off'' for demonstrated performance
above expectations in lieu of a cash bonus); and
(ii) If an agency chooses to provide additional retention credit
for performance in accordance with paragraph (e)(1)(i) of this section,
it must specify and document, in advance of the reduction in force, the
basis on which it will transmute an employee's rating; i.e., the agency
must describe how it will translate evidence of documented exceptional
performance to a higher performance rating under the appraisal system
(i.e., pattern of summary level) being applied to the reduction in
force, make this criteria readily available for review, and apply it
consistently to all competing employees.
(2) An agency that elects to provide additional retention credit to
competing employees in accordance with paragraph (e)(1)(i) of this
section must transmute the rating of the employee who meets the
criteria set forth in paragraph (e)(1)(i) to the highest summary level
of the pattern summary level being applied to the reduction in force
(i.e., a level ``4'' rating if the agency conducting the reduction in
force uses a pattern C or G summary level appraisal system, or a level
``5'' rating if the agency uses a pattern B, E, F, or H summary level
appraisal system). An agency cannot transmute a rating to a summary
level which is not among those in the pattern being applied to the
reduction in force.
(3) In situations in which the agency conducting the reduction in
force is using a pattern summary level rating appraisal system with a
summary level no higher than a level ``3'' (i.e., a pass/fail system)
but has employees rated previously under a pattern with higher summary
levels, the agency may, in its sole and exclusive discretion, elect to
give more performance credit to the employees with the higher summary
ratings than it gives to summary level ``3'' employees with no
documented evidence of exceptional performance (before augmenting for
veterans' preference in accordance with Sec. 351.504).
(f) Missing ratings. Use of performance ratings for competing
employees who do not have three actual ratings of record during the 4-
year period prior to the date of issuance of reduction in force notices
or the 4-year period prior to the agency-established cutoff date for
ratings of record permitted in paragraph (c)(2) of this section must be
determined under
[[Page 10930]]
paragraph (c) of this section, as appropriate, and as follows:
(1) The performance credit of an employee who has not received any
rating of record for any year during the 4-year period must be based on
the modal rating as defined in Sec. 351.203 for the summary level
pattern that applies to the employee's official position of record at
the time of the reduction in force.
(2) For an employee who has received two previous ratings of record
during the 4-year period calculate the performance credit by using a
proxy value for the missing rating. Calculate the proxy value by adding
the assigned values for the two actual ratings of record and dividing
by 2, with the result being either a whole number or a number with .5
decimal value. The performance credit is the sum of the value for the
missing rating (i.e., the proxy value) and the values for the two
actual ratings.
(3) For an employee with only one actual rating of record during
the period, calculate the performance credit by multiplying the points
assigned for that rating of record times three.
Sec. 351.504 Veterans' preference.
(a) Veterans' preference for both competitive and excepted service
employees is applied as follows:
(1) Each preference eligible employee who has a compensable
service-connected disability of 30 percent or more receives an
additional 5 points added to their performance credit. These employees
should be identified as being in veterans' preference Subgroup AD on
the retention register.
(2) Every other preference eligible employee receives an additional
3 points added to their performance credit. These employees should be
identified as being in veterans' preference Subgroup A on the retention
register.
(3) Non-preference eligible employees receive 0 additional points
added to their performance credit. These employees should be identified
as being in veterans' preference Subgroup B on the retention register.
(b) A retired member of a uniformed service is considered a
preference eligible under this part only if the member meets at least
one of the conditions of the following paragraph (b)(1), (2), or (3) of
this section, except as limited by paragraph (b)(4) or (5) of this
section:
(1) The employee's military retirement is based on disability that
either:
(i) Resulted from injury or disease received in the line of duty as
a direct result of armed conflict; or
(ii) Was caused by an instrumentality of war incurred in the line
of duty during a period of war as defined by 38 U.S.C. 101 and 301.
(2) The employee's retired pay from a uniformed service is not
based upon 20 or more years of full-time active service, regardless of
when performed but not including periods of active duty for training.
(3) The employee has been continuously employed in a position
covered by this part since November 30, 1964, without a break in
service of more than 30 days.
(4) An employee retired at the rank of major or above (or
equivalent) is considered a preference eligible under this part if such
employee is a disabled veteran as defined in 5 U.S.C. 2108(2) and meets
one of the conditions covered in paragraph (b)(1), (2), or (3) of this
section.
(5) An employee who is eligible for retired pay under 10 U.S.C.
chapter 67 and who retired at the rank of major or above (or
equivalent) is considered a preference eligible under this part at age
60, only if such employee is a disabled veteran as defined in 5 U.S.C.
2108(2).
Sec. 351.505 Length of service.
(a) All civilian service as a Federal employee, as defined in 5
U.S.C. 2105(a), is creditable for purposes of this part. Civilian
service performed in employment that does not meet the definition of
Federal employee set forth in 5 U.S.C. 2105(a) is creditable for
purposes of this part only if specifically authorized by statute as
creditable for retention purposes.
(b)(1) As authorized by 5 U.S.C. 3502(a)(A), all active duty in a
uniformed service, as defined in 5 U.S.C. 2101(3), is creditable for
purposes of this part, except as provided in paragraphs (b)(2) and (3)
of this section.
(2) As authorized by 5 U.S.C. 3502(a)(B), a retired member of a
uniformed service who is covered by Sec. 351.503(b) is entitled to
credit under this part only for:
(i) The length of time in active service in the Armed Forces during
a war, or in a campaign or expedition for which a campaign or
expedition badge has been authorized; or
(ii) The total length of time in active service in the Armed Forces
if the employee is considered a preference eligible under 5 U.S.C. 2108
and 5 U.S.C. 3501(a), as implemented in Sec. 351.504(b).
(3) An employee may not receive dual service credit for purposes of
this part for service performed on active duty in the Armed Forces that
was performed during concurrent civilian employment as a Federal
employee, as defined in 5 U.S.C. 2105(a).
(c)(1) The agency is responsible for establishing the service
computation date applicable to each employee competing for retention
under this part. If applicable, the agency is also responsible for
adjusting the service computation date to withhold retention service
credit for non-creditable service.
(2) The service computation date includes all actual creditable
service under paragraphs (a) and (b) of this section.
(d) The service computation date is computed on the following
basis:
(1) The effective date of appointment as a Federal employee under 5
U.S.C. 2105(a) when the employee has no previous creditable service
under paragraph (a) or (b) of this section; or if applicable,
(2) The date calculated by subtracting the employee's total
previous creditable service under paragraph (a) or (b) of this section
from the most recent effective date of appointment as a Federal
employee under 5 U.S.C. 2105(a).
Sec. 351.506 Records.
(a) The agency is responsible for maintaining correct personnel
records that are used to determine the retention standing of its
employees competing for retention under this part.
(b) The agency must allow its retention registers and related
records to be inspected by:
(1) An employee of the agency who has received a specific reduction
in force notice, and/or the employee's representative if the
representative is acting on behalf of the individual employee; and
(2) An authorized representative of OPM.
(c) An employee who has received a specific notice of reduction in
force under authority of subpart H of this part has the right to review
any completed records used by the agency in a reduction in force action
that was taken, or will be taken, against the employee, including:
(1) The complete retention register, if applicable, with the
released employee's name and other relevant retention information
(including the names of all other employees listed on that register,
their performance credit calculated under Sec. 351.503 as augmented by
veterans' preference under Sec. 351.504, and their service computation
dates under Sec. 351.505), so that the employee
[[Page 10931]]
may consider how the agency constructed the competitive level, and how
the agency determined the relative retention standing of the competing
employees; and
(2) The complete retention registers, if applicable, for other
positions that could affect the composition of the employee's
competitive level, and/or the determination of the employee's
assignment rights (e.g., registers to which the released employee may
have potential assignment rights under Sec. 351.701(b) and (c)).
(d) An employee who has not received a specific reduction in force
notice has no right to review the agency's retention registers and
related records.
(e) The agency is responsible for ensuring that each employee's
access to retention records is consistent with both the Freedom of
Information Act (5 U.S.C. 552), and the Privacy Act (5 U.S.C. 552a).
(f) The agency must preserve all registers and records relating to
a reduction in force for at least 2 years after the date it issues a
specific reduction in force notice.
Sec. 351.507 Effective date of retention standing.
(a) The retention standing of each employee released from a
competitive level in the order prescribed in Sec. 351.601 is
determined as of the date the employee receives a specific reduction in
force notice.
(b) The retention standing of each employee retained in a
competitive level as an exception under Sec. 351.606(b), Sec.
351.607, or Sec. 351.608 is determined as of the date the employee
receives a specific reduction in force notice, irrespective of when the
employee would have been released had the exception not been used. The
retention standing of each employee retained under any of this
paragraph (b) remains fixed until completion of the reduction in force
action which resulted in the temporary retention.
(c) When an agency discovers an error in the determination of an
employee's retention standing, it must correct the error and adjust any
erroneous reduction in force action to accord with the employee's
proper retention standing as of the effective date established by this
section.
0
26. Revise the heading of subpart F to read as follows:
Subpart F--Release from Competitive Level
0
27. Amend Sec. 351.601 by revising paragraph (c) to read as follows:
Sec. 351.601 Order of release from competitive level.
* * * * *
(c) When competing employees in the same tenure group have
identical performance credits as calculated pursuant to Sec. 351.503
(as augmented by veterans' preference as described in Sec. 351.504),
are in the same tenure subgroup, and have identical service dates (as
calculated pursuant to Sec. 351.505) and are therefore tied for
release from a competitive level, the agency may select any tied
employee for release.
0
28. Revise Sec. 351.602 to read as follows:
Sec. 351.602 Prohibitions.
An agency may not release a competing employee from a competitive
level while retaining in that level an employee with:
(a) A specifically limited temporary or term promotion; or
(b) A written decision under part 432 or 752 of this chapter of
removal or demotion from the competitive level.
0
29. Amend Sec. 351.604 by:
0
a. Revising paragraph (b); and
0
b. Removing paragraph (d).
The revision reads as follows:
Sec. 351.604 Use of furlough.
* * * * *
(b) Prior to engaging in a furlough, an agency must communicate to
competing employees, in writing, the criteria by which competing
employees will be furloughed and recalled to duty. In determining the
criteria by which competing employees will be furloughed and the order
in which they will be recalled to duty, the agency may consider the
agency's operational and mission needs, along with factors such as
employee's tenure group and subgroup; the employee's performance as
reflected in the employee's most recent rating of record; veterans'
preference; and the employee's length of service.
* * * * *
0
30. Revise Sec. 351.605 to read as follows:
Sec. 351.605 Abolishment of a competitive area.
(a) Appropriate use. An agency may use this paragraph (a) to reduce
the administrative burden of conducting a reduction in force when it
will eliminate all positions (including the positions of employees
otherwise excluded from the provisions of this part under Sec.
351.202(d)) within a competitive area within 180 days.
(b) Abolishment of competitive area. When an agency is abolishing
all positions in a competitive area within 180 days it may release a
competing employee without regard to retention standing. When invoking
this paragraph (b), an agency is not required to follow Sec. Sec.
351.403, 351.404, and 351.501 through 351.505. The agency must provide
for the exceptions under Sec. 351.606. The agency may provide for the
exceptions under Sec. 351.608(c) through (f) without providing notice
under Sec. 351.608(a)(4). An agency must provide any released
competing employee with notification content in accordance with Sec.
351.802(a)(1), (3), (5), and (6) and (b), along the employee's
competitive area and a statement that, because all positions in the
employee's competitive area are being abolished pursuant to this
section, the employee was not ranked relative to other competing
employees in the reduction in force. An agency may not apply assignment
rights pursuant to subpart G of this part when using this paragraph
(b).
0
31. Amend Sec. 351.606 by revising paragraphs (a) and (c) to read as
follows:
Sec. 351.606 Mandatory exceptions.
(a) Armed Forces restoration rights. When an agency applies Sec.
351.601, it shall give retention priorities over other competing
employees to each competing employee entitled under Sec. 351.209(b) to
retention for, as applicable, 6 months or 1 year after restoration.
* * * * *
(c) Documentation. Each agency shall record on the retention
register, for inspection by each employee, the reasons for any
deviation from the order of release required by Sec. 351.601.
0
32. Revise Sec. 351.607 to read as follows:
Sec. 351.607 Discretionary continuing exceptions.
An agency may make an exception to the order of release in Sec.
351.601 and to the action provisions of Sec. 351.603 when needed to
retain an employee (i.e., extend an employee's separation date) on
duties that cannot be taken over within 90 days and without undue
interruption to the activity by an employee with higher retention
standing. The agency must notify in writing each higher-standing
employee reached for release from the same competitive level of the
reasons for the exception.
0
33. Revise Sec. 351.608 to read as follows:
Sec. 351.608 Discretionary temporary exceptions.
(a) General. (1) An agency may use one of the exceptions authorized
under
[[Page 10932]]
this section to retain an employee (i.e., extend an employee's
separation date) after the effective date of a reduction in force,
notwithstanding the order of release under Sec. 351.601 or the action
provisions under Sec. 351.603. Temporary exceptions are time-limited,
but the duration may vary depending on a variety of factors as provided
in paragraphs (b) though (g) of this section.
(2) After the effective date of a reduction in force action, an
agency may not amend or cancel the reduction in force notice of an
employee retained under a temporary exception to avoid completion of
the reduction in force action. This does not preclude the employee from
receiving or accepting a job offer in the same competitive area in
accordance with a Reemployment Priority List established under part
330, subpart B, of this chapter, or under a Career Transition
Assistance Plan established under part 330, subpart E, of this chapter,
or equivalent programs.
(3) Each exception under a paragraph in this section stands alone
and may not be sequenced or stacked in combination with another
exception. If an agency determines that it can approve more than one
exception for an employee, the agency may apply the exception that
provides for the longest period of retention.
(4) When an agency makes an exception under this section for more
than 30 days, it must:
(i) Notify in writing each higher standing employee in the same
competitive level reached for release of the reasons for the exception
and the latest date the lower standing employee's retention is
projected to end; and
(ii) List opposite the employee's name on the retention register
the reasons for the exception and the latest date the employee's
retention is projected to end.
(b) Undue interruption. An agency may make a temporary exception
for not more than 90 days when needed to continue an activity without
undue interruption.
(c) Government obligation. An agency may make a temporary exception
to satisfy a Government obligation to an employee. Any application of
this exception is subject to the conditions and limitations established
by the agency and this section. The employee must use leave (paid or
unpaid) or paid time off continuously to cover all tour of duty hours
during the period the exception is in effect. The use of each type of
leave or paid time off must be consistent with the established rules
governing its use. Administrative leave under part 630, subpart N, of
this chapter (or similar authority) may not be used. The exception may
not take effect unless the employee signs a written agreement in which
the employee attests that he or she understands and agrees with the
conditions and limitations established by the agency and this section.
Authorized agency applications of this exception include the following:
(1) An exception may be approved under this paragraph (c) for an
employee who is eligible for, and has not exhausted, paid parental
leave under 5 U.S.C. 6382(d)(2) (or equivalent authority) based on the
birth of a child of the employee before the effective date of the
reduction in force. The exception may be approved through the date by
which the employee would be able to use all remaining available paid
parental leave to the employee's credit in connection with the birth,
if the leave is used continuously starting on the effective date of the
reduction in force.
(2) An exception may be approved under this paragraph (c) for an
employee who is eligible for, and has not exhausted, paid parental
leave under 5 U.S.C. 6382(d)(2) (or equivalent authority) based on the
placement of a child with the employee for adoption purposes before the
effective date of the reduction in force. The exception may be approved
through the date by which the employee would be able to use all
remaining available paid parental leave to the employee's credit in
connection with the placement, if the leave is used continuously
starting on the effective date of the reduction in force.
(3) An exception may be approved under this paragraph (c) for an
employee who is pregnant, or whose spouse is pregnant, as of the
effective date of reduction in force and who would be eligible for paid
parental leave under 5 U.S.C. 6382(d)(2) (or equivalent authority)
based on the expected birth. The exception may be approved through the
date that is 12 weeks after the birth.
(d) Leave for a sick leave purpose. An agency may make a temporary
exception to retain an employee covered by 5 U.S.C. chapter 63 (or
other applicable leave system for Federal employees), who has a
condition or circumstance that would warrant continuous use of sick
leave during all tour-of-duty hours of the period of retention if the
employee had available sick leave, provided--
(1) Such condition or circumstance continues throughout the period
of retention;
(2) The employee first uses any available sick leave in accordance
with the requirements part 630, subpart D, of this chapter (or other
applicable sick leave system), before using any other appropriate leave
(paid or unpaid) or paid time off, consistent with any applicable
requirements governing use of the leave or paid time off;
(3) The use of leave or paid time off is continuous through all
tour-of-duty hours of the period of retention; and
(4) The period of retention does not exceed 90 days.
(e) Annual leave. (1) An agency may make a temporary exception to
retain on accrued annual leave an employee who:
(i) Is being involuntarily separated under this part;
(ii) Is not covered by Sec. 351.606(b) (because the employee is
covered by a Federal leave system under an authority other than 5
U.S.C. chapter 63, the employee is covered by a retirement law not
referenced in Sec. 351.606(b), or is covered by a health benefits law
other than 5 U.S.C. chapter 89); and
(iii) Will attain first eligibility for an immediate retirement
benefit under 5 U.S.C. 8336, 8412, or 8414 (or other authority), and/or
establish eligibility under 5 U.S.C. 8905 (or other authority) to carry
health benefits coverage into retirement during the period represented
by the amount of the employee's accrued annual leave.
(2) An agency may not approve an employee's use of any other type
of leave after the employee has been retained under this paragraph (e).
(3) This exception may not exceed the date the employee first
becomes eligible for immediate retirement or for continuation of health
benefits into retirement, except that an employee may be retained long
enough to satisfy both retirement and health benefits requirements.
(4) Accrued annual leave includes all accumulated, accrued, and
restored annual leave, as applicable, in addition to annual leave
earned and available to the employee after the effective date of the
reduction in force. When approving a temporary exception under this
paragraph (e), an agency may not advance annual leave or consider any
annual leave that might be credited to an employee's account after the
effective date of the reduction in force other than annual leave earned
while in an annual leave status.
(f) Military spouse. An agency may extend the separation date
beyond the effective date of a reduction in force of a military spouse
as defined in Sec. 351.203. The agency may establish a maximum number
of days, up to a maximum of 90 days, for which an exception may be
approved.
(g) Other exceptions. An agency may make a temporary exception to
extend an employee's separation date beyond the effective date of the
reduction in
[[Page 10933]]
force when the temporary retention of the lower standing employee does
not adversely affect the right of any higher standing employee who is
released ahead of the lower standing employee. The agency may establish
a maximum number of days, up to 90 days, for which an exception may be
approved.
0
34. Revise the heading for subpart G to read as follows:
Subpart G--Assignment Rights
0
35. Revise Sec. 351.701 to read as follows:
Sec. 351.701 Assignment involving displacement.
(a) When a competitive service tenure group employee with a current
annual performance rating of record of minimally successful (Level 2)
or equivalent, or higher, is released from a competitive level, an
agency must offer assignment, rather than furlough or separation, in
accordance with paragraph (b) of this section to another competitive
position that requires no reduction, or the least possible reduction,
in representative rate. The employee must be qualified for the offered
position. The offered position must be in the same competitive area and
have the same type of work schedule (e.g., full-time, part-time,
intermittent, or seasonal) as the position from which the employee is
released. Upon accepting an offer of assignment, or displacing another
employee under this part, an employee retains the same status and
tenure in the new position. The promotion potential of the offered
position is not a consideration in determining an employee's right of
assignment.
(b) In accordance with paragraph (a) of this section, a released
employee shall be assigned to a position:
(1) That is held by another employee with lower retention standing
in the same tenure group; and
(2) That is not more than three grades (or appropriate grade
intervals or equiv
[…truncated; see source link]Indexed from Federal Register on March 5, 2026.
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