Feds to Fire by Performance, Not Tenure, in Streamlined Layoff Rules
Published Date: 8/3/2026
Rule
Summary
The Office of Personnel Management (OPM) is revising its reduction in force (RIF) regulations to 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 by modifying the types of employees who are excluded from RIF competition. OPM is also revising its regulations regarding the reemployment priority list (RPL), career transition assistance program (CTAP), the interagency career transition assistance program (ICTAP), and transfers of function.
Analyzed Economic Effects
12 provisions identified: 3 benefits, 3 costs, 6 mixed.
Performance Becomes Primary RIF Factor
Starting September 2, 2026, agencies must rank employees for reductions in force (RIFs) by performance first, then add veterans' preference, and use tenure subgroup and length of service only as tie-breakers. If your RIF notice is issued on or after September 2, 2026, this new order of retention applies to you.
Veterans Get Numeric Preference Credits
Under the new rule, veterans' preference is applied by adding points to performance credit: +5 points for preference eligibles with a compensable service-connected disability of 30% or more, and +3 points for other preference eligibles. Those added points are combined with performance credit before using tenure subgroup and service computation date as tie-breakers.
Abolishing Entire Competitive Area Simplified
When an entire competitive area is being abolished and all positions in that area are abolished within 180 days, agencies may release employees without ranking them on a retention register or applying assignment rights, and may use a simplified notice process. This changes procedures for employees in such abolishments.
New RIF Performance Scoring System
OPM now calculates a numeric performance credit using your three most recent ratings from the relevant four-year period: Level 5 = 7 points, Level 4 = 5 points, Level 3 = 3 points, and Level 1 or 2 = 0 points. That numeric score is used in retention registers to decide who is retained in a RIF.
Some Hires Excluded From RIF Competition
OPM excludes certain employees from RIF competition: those in initial probationary periods, trial periods, temporary or time-limited appointments of one year or less, and Schedule C and Schedule G employees. These employees are not 'competing employees' for RIF purposes and agencies may take actions without using RIF procedures.
Skills-Based Assessments Required for Assignments
Agencies must use job-related skills assessments to decide whether employees or Reemployment Priority List (RPL) candidates are qualified for RIF assignment or RPL selection, unless the person held the same or substantially similar position within five years and had a Level 3 (Fully Successful) or higher rating. The change implements skills-based selection per the Chance to Compete Act of 2024.
New Assignment Rights Replace 'Bump and Retreat'
OPM replaces 'bump and retreat' with assignment rights: a released competitive‑service employee may be assigned to a qualifying position held by an employee with lower retention standing, generally within three grades below, or within five grades for 30%+ disabled veterans. This changes how released employees may displace others.
USERRA Retention and Restoration Clarified
The rule requires agencies to apply USERRA retention protections and restoration rights as a mandatory exception to the order of release in a RIF. If an entire competitive area is abolished, an employee entitled to USERRA protections must be assigned elsewhere in the agency; if an entire agency is abolished, OPM will provide placement assistance elsewhere in the Executive Branch.
Transfer‑of‑Function Rules Narrowed
OPM narrowed transfer‑of‑function requirements so they apply only to transfers between agencies (not within an agency) and identifies employees tied to a transferring function as those who perform the function at least half the time. This changes which employees are treated as tied to a transferred function.
RPL, CTAP, and ICTAP Updated to New Framework
OPM updated Reemployment Priority List (RPL), Career Transition Assistance Program (CTAP), and Interagency CTAP (ICTAP) rules to match the new RIF system: references to old tenure groups are replaced, selection methods emphasize skills-based assessments, preexisting eligibility through OPM‑recognized appointments is preserved, and agencies have exceptions to retain or finalize appointments of probationary employees.
Pathways/Post‑Secondary Appointments Clarified
OPM updated rules in 5 CFR parts 316 and 362 to clarify how Pathways and post‑secondary student appointments are treated for RIF purposes so they conform to the new RIF framework. This clarifies RIF treatment for those in Pathways programs and post‑secondary student appointments.
Erosion‑of‑Duties Reclassifications Removed From RIF
Agencies no longer must use RIF procedures for erosion‑of‑duties reclassifications, but they cannot perform such a reclassification after announcing a RIF if it would worsen an employee's retention standing. This removes one trigger for RIF procedures while adding an anti‑manipulation safeguard.
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The Office of Personnel Management (OPM) is issuing final regulations to revise how an employee may appeal a furlough of more than 30 days, separation, or demotion by a reduction-in-force (RIF) action. OPM will replace the Merit Systems Protection Board (MSPB) as the adjudicative agency for such appeals. The rule establishes a uniform, record-based OPM appeal process; clarifies the appellant's burden; requires production of the complete agency record; preserves collateral statutory remedies; and applies prospectively to improve timeliness, consistency, and cost-effectiveness while maintaining administrative review.