Steps to Take When Facing a RIF as a Federal Employee

As the federal government is currently facing budget cuts across the board, a significant number of federal employees are concerned about pending reduction-in-force (RIF) personnel actions.  As the news highlights current events concerning RIFs impacting numerous federal agencies, federal employees have many questions regarding how they may be impacted by an RIF.  Navigating this uncertainty requires a clear understanding of the underlying RIF regulations, employee options and rights, including available resources to assist impacted employees. It is crucial for federal employees to become informed about the process to safeguard their careers and livelihoods.

Whether you are concerned about a potential RIF or have already received an RIF notice, it is important to familiarize yourself with the required procedures and options available to ensure you make the most informed decision during this challenging season for federal employees.  This article will guide you through critical steps to prepare effectively for an RIF as a federal employee. From understanding federal regulations and legal rights to exploring financial preparations and transition support, we’ll cover these important considerations to ensure you are well-prepared and positioned to make strategic and informed decisions.

Understand the RIF Process and Regulations

A federal agency is permitted to reduce its workforce through an RIF when it follows the procedures outlined in 5 C.F.R. § 351. The federal regulations are designed to ensure these decisions are made based on legitimate business needs, and when agencies conduct an RIF, they must follow these detailed rules set by the Office of Personnel Management (OPM). OPM guidelines provide a clear path for agencies conducting an RIF to ensure transparency and fairness. For example, all agencies must follow OPM rules that prioritize employee retention based on specific criteria that include tenure of appointment, veterans’ preference, length of service, and performance ratings. Moreover, federal employees have rights protected by laws to ensure fairness in RIF decisions. The Civil Service Reform Act is one such law.

Additionally, an agency is generally required to provide an employee with a 60-day notice prior to effectuating an RIF; however, with OPM’s approval, an agency may reduce the required notice period to 30 days pursuant to 5 CFR § 351.801.

Competitive Areas, Retention Standings, and Bump and Retreat Rights

After an agency creates a RIF plan, it must establish the competitive areas in which employees are considered for retention.  Employees are then placed in competitive levels as defined by 5 CFR § 351.403(a)(1).

Additionally, the agency must prepare retention standings for impacted employees.  These lists are essential to ensure an agency’s execution of an RIF conforms with the underlying regulations.  The agency must accurately calculate and organize the RIF plan, and include a Retention Register, which lists individuals from highest to lowest retention standings within their competitive levels.  Employees are ranked based on four main retention factors, including tenure, veterans’ preference, service length, and performance ratings.

If you receive an RIF notice, it is essential that you carefully review your notice to ensure your information is accurate, as any errors may impact whether you are retained under the agency’s RIF plan.  For example, regarding tenure of employment, employees are grouped into three categories.  Group I is composed of career employees not currently serving a probationary period.  Group II is composed of career-conditional employees and those serving a probationary period.  Group III is comprised of other types of employees, including temporary or term employees.  It is imperative that you are properly placed in the correct Group.

Also, performance ratings are especially significant in determining retention, as higher performance ratings can increase an employee’s chances of retention.  If any of this information is inaccurate on your RIF notice, you should reach out to your agency contact to ensure the issue is corrected.

An employee’s standing on the Retention Register will impact their Bump and Retreat Rights, which impacts an employee’s possibility of retention to another position.  In a “First Round RIF Competition,” the agency will apply the four retention factors to a competitive level

to identify which employee(s) has the lowest retention factor.  The agency may use RIF procedures to release the lowest-standing employee(s) from the competitive level.  In a “Second Round RIF Competition,” the agency will again apply the four retention factors to determine whether a released employee has a bump or retreat right to a position in a different competitive level, within the competitive area, that is held by an employee with a lower retention standing.

Bump rights allow higher-standing employees to displace lower-standing employees within a different competitive level if they have a performance rating at least Minimally Successful (Level II). On the other hand, retreat rights enable those released to reclaim a similar position they once held if the job is occupied by someone with lower standing.  Bump and retreat rights are available to ensure fair assessment of qualifications and retention standing for all competitive service employees. 

Reemployment and Reassignment Options 

The key to handling the financial impact of a RIF is often securing future employment. Fortunately, resources are available to aid in transitioning an impacted employee to new career opportunities.  Employees facing an RIF have reemployment and reassignment rights specified by OPM. Impacted employees can access the agency’s career transition assistance plan, which offers services and selection priority for eligible employees. For example, if you are separated from your position, you can be included on your agency’s Reemployment Priority List. This list gives you priority for open positions within your former agency, provided you have not refused a similar position. Tenure Group I employees who have been separated remain on the list for two years, and Group II employees for one year. Furthermore, The Interagency Career Transition Assistance Plan (ICTAP) also offers assistance. The ICTAP provides special selection priority for displaced employees applying for new federal jobs advertised on USAJOBS.

As you consider your options as an impacted employee affected by a RIF, you may also have options such as moving to a lower-grade position or transferring to other agencies. Employees are encouraged to manage their records and engage in informational webinars to learn about the above resources to consider options available to them.

Understanding and utilizing available career transition resources can greatly facilitate an impacted employee’s path to reemployment.  In the process, networking is also essential. By expanding your network both within and outside your current federal agency, an impacted employee can increase his or her job prospects and financial stability. 

Retirement Eligibility

For those employees who are retirement eligible, you may want to work with your agency’s benefits specialist to help you calculate your potential pension to consider whether retirement is in your best interest.  Additionally, it is helpful to know that those who face involuntary separation from federal service may be eligible for discontinued service retirement.  Your agency benefits specialist can help you determine whether you may be eligible under this regulation, as the minimum age service under this section is 50 years of age with 20 years of credible federal service or any age with 25 years of credible federal service.  Therefore, you may have the option to retire under the discontinued service retirement authority although you may not have been retirement eligible prior to the RIF.

Consider Unemployment Compensation

If you are separated from federal service pursuant to an RIF, you may be eligible for unemployment compensation. By knowing the specific laws and regulations around unemployment compensation in their state, federal employees can protect their rights and interests. You may want to prepare by familiarizing yourself with your state’s procedures for unemployment benefits to ensure you are able to receive timely support if required. Utilizing this benefit can temporarily alleviate a portion of the financial burden you would experience during an RIF, offering you a safety net while you pursue new job opportunities. Being proactive and informed about unemployment compensation can make a significant difference in navigating financial challenges following an RIF.

Reassess Your Financial Plans

If you are impacted by an RIF, it is imperative to reassess your financial plan.   For example, you may want to consider the implications of retiring earlier than you anticipated, adjusting your retirement savings contributions, or even the tax implications of withdrawing funds from your retirement account.  Employees may want to reach out to their agency’s Employee Assistance Program (EAP) to see what financial planning resources may be available to them.  Another option is for employees to speak with their agency’s benefits specialists to understand what impact their retirement or leaving federal service would have on their benefits, including their future pension and/or healthcare benefits.  Additionally, it may be prudent to discuss your options with a financial planner to understand the implications of accessing your Thrift Savings Plan (TSP) account and other retirement accounts you may have, along with any other financial matter that you have.

Severance Pay Entitlements

Federal employees may qualify for severance pay after an RIF under certain conditions pursuant to 5 U.S.C. § 5595 and 5 CFR part 550, subpart G. According to OPM, to be eligible for severance pay, “an employee must be employed by an agency covered by 5 U.S.C. 5595, serving under a qualifying appointment, have a regularly scheduled tour of duty, have completed at least 12 months of continuous service, and be removed from Federal service by involuntary separation for reasons other than inefficiency (that is, unacceptable performance or conduct).”

Severance pay is calculated based on your length of service, providing one week’s pay per year for the first 10 years, and two weeks’ pay for each additional year, with age adjustment factors for employees older than 40 years old. However, if you find a permanent federal position, severance payments will cease. Also, the total severance pay an impacted employee may receive cannot exceed 52 weeks over the span of his or her lifetime.  OPM has provided a calculator which federal employees can use to estimate their potential severance pay.

Additionally, after separating from federal service, an impacted employee would be entitled to a lump sum payment of his or her unused annual leave.  Also, although the separated employee would not receive a payout of his or her unused sick leave, their unused sick leave may be used to calculate your years of service as it relates to their pension (although that time does not count toward retirement eligibility in calculating years of service).

Consulting with an Employment Lawyer

The federal regulations that regulate an agency’s RIF implementation allow employees who have been impacted by an RIF to appeal the action to the Merit Systems Protection Board (MSPB) within 30 days of the effective date of the personnel action.  The MSPB exists to ensure federal personnel actions are taken in a fair and impartial manner to meet Agency organizational needs.

If you have been impacted by an RIF, it is prudent to consult with a federal employment attorney to determine whether filing an appeal with the MSPB is in your best interest.

Additionally, if you believe the RIF was initiated in a discriminatory manner, you may be able to challenge the action before the Equal Employment Opportunity Commission (EEOC).  Federal employment attorneys are professionals who are trained to assist federal employees in understanding the relevant federal statutes and regulations and assess whether any of their rights have been violated. An experienced federal employment lawyer can help you navigate MSPB and EEOC procedures if you suspect your termination was wrongful. Lawyers can also inform you about rights to potential placement in another position within your agency. By having legal representation, you can ensure you have good counsel available to you during the RIF proceedings.  As the MSPB and EEOC have strict timelines within which an employee must file an appeal, it is essential that you act quickly to preserve your appeal rights.

To get assistance with federal employment law issues, contact Lipp Law today.