Trump Administration Proposes Revisions to Regulations Governing Federal Layoffs

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The Office of Personnel Management (OPM) published a on March 5 to revise the regulations that govern how federal agencies can undertake a “reduction in force” (RIF) in order to lay off civilian federal employees, most prominently making it less cumbersome to undertake RIFs and prioritizing the consideration of employee performance ratings in RIFs rather than relying primarily on employee seniority. Comments on the proposal are due by May 4.

In 2025, the Trump Administration reduced the federal workforce significantly through a combination of early retirement programs, voluntary buyouts, and RIFs. OPM, which issues regulations and guidance for federal agencies (including HHS) to follow in managing their workforces, states that its proposal is intended to place “less burden on agencies invoking [RIF] rules, and to increase the focus on merit in determining retention standing.”

The statute requiring the establishment of RIF procedures directs OPM to give “due effect” to four factors in determining the ranking of employees that may be removed in a RIF: tenure of employment (meaning classification as probationary, permanent, etc.), veterans’ preference, length of service, and efficiency or performance ratings. Under the current regulations, length of service is the primary determining factor in establishing a “retention register” the agency must follow in a RIF, such that agencies engaging in RIFs typically must remove the most junior employees without considering performance. Under the new proposed regulations, the primary determining factor for priority will be performance ratings, plus adjustments for veteran status, with length of service factoring only as a tiebreaker.

The proposed rule makes other changes intended to give agencies more discretion in using RIFs, including a change to when agencies can transfer employees to less senior positions and changes to how agencies define a unit of their agency within which employees are prioritized for a RIF. The proposed rule also places employees on time-limited employment of less than one year and employees on probationary or trial periods outside of RIF procedures, potentially making it much easier to remove such employees.

While the statute authorizing RIF regulations is quite broad, the proposed rule may be subject to litigation. Lawsuits challenging the reductions in federal workforce over the last year have often argued, with varying degrees of success, that RIF regulations were not properly followed.

The agency notes that the RIF regulations have not been substantially updated for decades. Until their use at the beginning of the second Trump Administration, RIFs have been relatively uncommon since World War II, utilized during the Reagan Administration and the Clinton Administration but with most efforts to reduce the federal workforce occurring through hiring freezes and attrition. In February, OPM finalized to create a formal new civil servant classification known as “Schedule Policy/Career,” earlier known as “Schedule F,” intended to make it easier to remove such employees on an individual basis, though such positions would not be treated differently than other similarly placed civil servants under the new RIF rules.

For more on these reductions, Manatt on Health subscribers can see the Manatt on Health .

For more on the rule, Manatt on Health subscribers can see the February 9 of Insights This Week.

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