Federal Layoffs: Performance Now Beats Longevity in RIF Rules
Published Date: 3/5/2026
Proposed Rule
Summary
The Office of Personnel Management is updating the rules for Reduction in Force (RIF), which affects federal employees facing job cuts. The new rules focus more on job performance than how long someone has worked, and they tweak who’s protected from layoffs. These changes aim to make the process fairer and smoother, with a comment deadline on May 4, 2026.
Analyzed Economic Effects
6 provisions identified: 5 benefits, 0 costs, 1 mixed.
Performance, Not Tenure, Drives RIF Picks
OPM proposes to make employee performance the main factor when deciding who stays during a reduction in force (RIF), instead of prioritizing tenure or length of service. The rule also says only the annual performance evaluation (the rating of record) may be used when computing performance credit for retention standing.
Who Is (and Isn’t) in RIF Competition
OPM would redefine who counts as a competing employee by creating a 'competitive service tenure group' and an 'excepted service tenure group' (each with two subgroups). The rule expressly excludes employees serving an initial probationary period, trial periods, temporary or time-limited appointments of 1 year or less, and Schedule C and Schedule G appointees from RIF competition.
Limits on Reclassifying Jobs During RIFs
OPM would remove the rule that required agencies to use RIF procedures for erosion-of-duties reclassifications that would take effect within 180 days of an announced RIF. At the same time, OPM would bar agencies from doing an erosion-of-duties reclassification between an announced RIF and its completion if that reclassification would hurt an employee's retention standing.
Transfers of Function Only Between Agencies
OPM proposes to change the definition of 'transfer of function' so it applies only when a function moves from one agency to another (i.e., interagency transfers), not when functions move within the same agency. That means agencies would not need to follow transfer-of-function RIF procedures for internal reorganizations.
Shutdown Furloughs Not Treated as RIF Furloughs
OPM would redefine 'furlough' to exclude emergency shutdown furloughs caused by a lapse in appropriations where the duration is unknown and depends on Congress. OPM says this avoids requiring agencies to send repeated RIF furlough notices during prolonged funding lapses.
Changes to RPL, CTAP, and ICTAP Processes
OPM states it will revise rules for the reemployment priority list (RPL), the Career Transition Assistance Program (CTAP), and the Interagency Career Transition Assistance Program (ICTAP) as part of the proposed RIF regulatory updates. The proposal generally aims to streamline and improve processes related to RIFs, transfers of function, and furloughs.
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Key Dates
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