Continuing resolution creates doubts agencies can honor OPM’s ‘deferred resignation’ deal

Many federal employees say they're concerned OPM is using an untested approach for headcount reduction.

Many federal employees say they’re wary of the Office of Personnel Management’s “voluntary resignation” offer, and warn the agency is taking a novel approach that doesn’t offer any guarantees.

According to OPM’s mass email sent Tuesday, federal employees would be placed on paid administrative leave until the effective date of their resignation, which OPM said should be no later than Sept. 30. Employees who want to accept the offer must respond to the email by Feb. 6.

OPM posted on X Wednesday said federal employees who accept its deal “can choose to resign and will no longer be required to work.”

“Whether you travel, relax at home, or explore new opportunities, you’ll continue receiving your full government pay and benefits,” OPM wrote.

But 77% of respondents in a Federal News Network pulse survey said they don’t plan to take the offer. Among their concerns, federal employees are concerned OPM is using an untested approach for headcount reduction.

That’s because a continuing resolution is keeping most of the federal government through March 14. The Anti-Deficiency Act prohibits agencies from obligating funds ahead of what Congress has appropriated.

“There is no money for employees’ salaries beyond March 14th. Promises of such create an ‘unfunded or contingent liability’ which is prohibited under the Anti-Deficiency Act,” one survey respondent wrote. “I feel like this is an illusory offer.”

“If we resign now, we can’t be guaranteed we will continue to get paid through September,” another federal employee wrote in the survey.

Former federal financial and policy officials agree OPM’s approach raises questions.

A former agency chief financial officer agreed OPM’s offer federal workforce could be a violation of the Anti-Deficiency Act.

“You cannot commit the government beyond what you have received appropriations for. If the government is only funded through March, how can you commit to pay employees through September?” the former agency CFO said.

Robert Shea, a former associate director of the Office of Management and Budget under the George W. Bush administration, said federal employees who take OPM’s deal wouldn’t get paid, in the event of a government shutdown, just like the rest of the federal workforce.

“If there’s a shutdown, employees on administrative leave wouldn’t get paid, just like employees not on administrative leave. Now, they invariably get back pay, but that’s not guaranteed,” Shea said.

Another former OMB official said prior administrations have used Voluntary Separation Incentive Payments (VSIP) and Voluntary Early Retirement (VERA) to reduce the headcount of certain agencies. But those buyout offers are capped at $25,000.

“Probably, if you were to survey the OMB staff, most people there have handled a VERA-VSIP package, because they actually aren’t that uncommon. But sometimes they’re really small. It could be like tens of people,” the former OMB official said.

Former President Bill Clinton used VERA-VSIP buyouts worth up to $25,000 to cut 377,000 positions from the federal workforce during his first term in office, according to his fiscal 2001 budget request to Congress.

“They go through an OPM and an OMB review, and that’s all to make sure that you’re basically not running up huge budget costs that nobody can afford, and you’re staying within the targets and the mission and the goals of what you’re intended to go, and that you’re actually prioritizing mission,” the former OMB official said.

Clinton said in April 1995 that the buyouts “were not offered in a random fashion,” at that almost 70% of the buyouts in non-Defense Department agencies went to federal managers and other employees at higher grade levels.

“We targeted them to reduce the layers of bureaucracy and micro-management that were tying government in knots. We made sure that departments and agencies tied their buyout strategies to their overall plans to streamline their bureaucracies,” Clinton said.

OPM hasn’t used the word “buyout” to describe its offer. Instead, the agency is calling its offer a “deferred resignation,” and that federal employees who take the deal would be placed on administrative leave.

OPM, in the final days of the Biden administration, also finalized guidance to comply with the 2016 Administrative Leave Act, capping how long federal employees can remain on administrative investigative leave to 10 days per year.

The former OMB official said officials who accept OPM’s offer don’t have any guarantee their agencies can honor it.

“The distinction that I see in this guidance is you don’t really get that guarantee necessarily. What they’ve asked people to do is say, ‘Add me to this list,’ and you may be put on administrative leave — which actually has a cap in federal law,” the former OMB official said. “That’s a fundamentally different way of saying, ‘I’m giving you this promise of a buyout or an incentive.’”

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