Reduction in Force

Generally, civil service employees cannot be dismissed or have other major adverse actions taken against them except for cause, generally involving poor performance or misconduct.  Employees have certain procedural rights regarding how those actions are taken and how they can be challenged.

A reduction in force or RIF is another avenue for separating, demoting, or furloughing an employee that is not based on any conduct of that employee, but based on the reasons specified above.

In fact, a RIF results in abolishing positions and may not be directed at specific individual employees.

What is a RIF?

A RIF exists when an agency takes personnel actions such as separation from service, demotion or furlough for the purpose of –

    • Lack of work
    • Shortage of funds;
    • Insufficient personnel ceiling;
    • Reorganization (meaning the elimination, addition, or redistribution of functions or duties in an organization);
    • The exercise of reemployment rights; and/or
    • Reclassification of an employee’s position due to erosion of duties after a RIF has been announced.

To whom do the RIF regulations and policies apply?

RIFs must be conducted in accordance with statutory requirements, 5 U.S.C. § 3501-3503, regulations promulgated by the Office of Personnel Management (OPM), 5 C.F.R. 351.201, et seq. and any additional agency policies or provisions in collective bargaining agreements.

The RIF regulations apply to all employees in the competitive service, but not to employees in the Senior Executive Service, or those requiring confirmation by Congress.

If the appropriate agency authority decides to carry out a Reduction in Force, it must determine the effective date and how many positions will be abolished.  It also may at its option make a formal announcement about the general parameters of a RIF.

It must begin to follow required procedures prior to taking any concrete actions regarding employees.  At that point, the agency goes through a series of steps to select the employees to be RIF’d, and then must notify each employee of their individual RIF action.  These steps are –

1. Competitive area.  The agency must delineate the competitive area(s) to be affected by the RIF.  These are areas in which employees compete for retention in a RIF.  They must be defined solely in terms of the agency’s organizational unit(s) and geographic location (within a local commuting area).

A competitive area may be all or part of an agency.  If part of an agency, it is a subdivision under  separate administration within the local commuting area.  A competitive area must be established  at least 90 days prior to a RIF effective date unless the agency requests an exception from OPM.  5 C.F.R. 351.402.

2. Competitive level.  Within each competitive area, the agency establishes competitive level(s). These consist of all positions in the competitive area that are the same grade (or occupational level) and classification series, and which are similar enough in duties, qualification, requirements, pay schedules, and working conditions that an agency may reassign the incumbent of one position to any of the other positions in the level without interruption.

A competitive level could consist of many positions or of one unique position.

Agencies must also establish separate competitive levels according to the following categories:

    1. by service (competitive service or excepted service);
    2. by appointment authority;
    3. by pay schedule;
    4. by work schedule (full-time, part-time, intermittent or seasonal); and
    5. by trainee status.   5 C.F.R. § 351.403.

3. Retention Roster.  For each competitive level, the agency creates a retention roster that ranks employees as to priority for being released in the RIF, based on the following factors:

    1. tenure of employment (i.e., type of position, including permanent v. temporary appointment and probationary status
    2. military preference;
    3. length of service;
    4. efficiency or performance ratings. 5 U.S.C. § 3502.

In order to create the retention roster, the agency must have up-to-date information on each employee’s official position description, three most recent performance ratings, service computation date and veteran’s preference status.

The agency creates tenure groups based on status as permanent, indefinite, term or temporary appointment and probationary status. Veteran’s preference affects the tenure group placement, while good performance is used to enhance the length of service.

4. Order of Release.  The retention roster is used to determine the order or releasing employees to meet the goals of the RIF. Employees are selected for release in inverse order of their retention standing.

5. Reassignment Rights.  After determining who will be separated, the agency essentially performs a second round process with the retention register to determine the reassignment rights of the RIF’d employees, using the same four factors used to determine who would be RIF’d. Reassigned employees displace employees on different retention rosters who have lower retention standing.  5 CFR 351.701

    1. Eligibility.  An employee is eligible for reassignment if s/he is a permanent employee in the competitive service, has a current annual performance evaluation of at least minimally successful (or equivalent), and is qualified for the offered position.
      • Employees in the excepted service have no assignment rights, but an agency may elect to provide its excepted service employees with RIF assignment rights to other excepted positions.
    2. Positions offered.  Must be in the same competitive area, last at least 3 months and have the same type of work schedule (full-time, part-time, intermittent or seasonal).
    3. Bumping.  Reassignment to another employee’s position who is in a lower tenure group or a lower sub-group within a tenure group. The position must be no more than three grades lower than the position the employee is being released from.
    4. Retreating.  Reassignment to a position held by another employee in the same tenure group and subgroup but with lower retention standing.  The position must be the same or essentially identical position formerly held by the released employee.

6. RIF Notices.  After the agency uses the retention roster to determine who will be RIF’d and their reassignment rights, it must prepare written notices for each RIF’d employee.

    1. Timing.  The notice must be provided at least 60 days prior to the release date, unless the agency head asks OPM to shorten the period to no less than 30 days. 
    2. Contents.  The notice must contain the action to be taken (separation, demotion or furlough), the reasons for the action, the effective date, the employee’s competitive area and competitive level, retention subgroup, length of service, and three most recent performance ratings, information on reemployment rights and on the right to appeal the RIF to the Merit Systems Protection Board (MSPB).  It may also contain benefits information.
    3. Benefits.  A RIF’d employee may be eligible for severance pay, a retirement annuity, selection priority for applying for other federal government positions, unemployment compensation, or training.
      • The employee may also be entitled to refunds of retirement contributions, a lump sum payment for annual leave, health and life insurance benefits, and outplacement assistance.
    4. Notice to other parties in large RIFs.  When 50 or more employees in a competitive area receive separation notices, the agency must provide written notice to certain state and local agencies and the bargaining unit representative.
    5. Status during notice period. When possible the agency should retain the employee in an active duty status.  However, in an emergency where the agency lacks work or funds, it may place the employee on annual leave, leave without pay, or a non-pay status, with or without his consent.  5 C.F.R. § 351.806

An agency is not required to use RIF procedures to achieve a reduction in force due to lack of work, shortage of funds, etc.  It may use other means such as reassigning employees to vacant positions, hiring freezes, voluntary buy-outs, voluntary early retirements, and separating temporary employees (who do not have civil service rights). 

However, if a permanent employee is involuntarily separated from service, demoted or furloughed for more than 30 days due to one of the reasons in the RIF regulations, RIF procedures must be followed.

Given the extremely burdensome requirements for a RIF and the vulnerability of RIF actions to legal challenge, agencies will generally prefer these other methods when possible, and will often see how much can be achieved with them before moving to a RIF:

  • Transfers – must be to positions at the same pay and grade, but need not be in the same line of work or location.  An employee who refuses a transfer may be separated at the discretion of the agency.
  • Voluntary Early Retirement Authority (VERA) – for employees with at least 20 years of service and at least age 50, or 25 years of service regardless of age. Use of this authority must be approved by OPM.
  • Voluntary Separation Incentive Payments (VSIP) (buyouts) – permanent employees with at least 3 years of service can get a lump sum payment up to $25,000 for voluntarily retiring or resigning.   Use of this authority must be approved by OPM.

A RIF action may be appealed by the employee to the Merit Systems Protection Board (MSPB) and then to court (the Federal Circuit Court of Appeals). An employee who accepts an offer of assignment to another position may not appeal the RIF action to the Board. The exception to

MSPB review is if a collective bargaining agreement covers RIFs, the employee must use the negotiated grievance procedure, and may not appeal to the Board unless there is an allegation that the action was based on discrimination.

1. Timing. MSPB appeals must be filed during the 30-day period beginning the day after the effective EPA employeesdate of the RIF action. If the negotiated grievance procedure is used, the timing and process will be set out in the collective bargaining agreement.

2. Basis for challenge. The employee may challenge the asserted reason for the RIF (i.e. that it was not conducted for one of the reasons set out in the regulations) and/or that there was a “substantial departure” from applicable procedures.

Legitimate reason for a RIF. An agency has complete discretion, and may not be challenged, concerning its decisions on the composition and structure of the work force.

However, the employee may claim that the reason given for the RIF is not legitimate, i.e. there was not a legitimate reorganization, shortage of funds, etc.

A RIF based on shortage of funds need not be based on an actual shortage of funds, if a budget shortfall is reasonably anticipated by agency management. In fact, agencies must anticipate possible lack of funds given the requirement of 60-day notice to an employee before their separation date.

Compliance with regulations. Agencies must apply the RIF regulations “uniformly and consistently.” 5 CFR 351.201(c).

A claim that the RIF regulations were not followed could include not properly establishing the competitive areas, competitive levels, the employee’s placement on the retention register or the provision of reassignment rights.

An employee may also claim that the real reason they were selected for separation was dissatisfaction with the particular employee (rather than the need to abolish the position), discrimination on the basis of race, gender, age or disability or retaliation for whistleblowing.

3. Burden of proof. The burden is on the agency to prove by a preponderance of the evidence that the RIF regulations were properly invoked for one of the legitimate management reasons specified in the regulation, and when challenged, the agency also bears the burden of proving by a preponderance of the evidence that it properly applied RIF regulations, including as to the appellant’s competitive area and competitive level, and proving that it properly afforded the appellant his assignment rights.

However, claims of discrimination or whistleblowing are affirmative defenses to the RIF, on which the employee bears the burden of proof.

As noted above, the very complexity of the RIF regulations and procedures provides many possibilities for challenges to their implementation in RIF actions.

 

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