In the Federal Government, layoffs are called reduction in force (RIF) actions. When an agency must abolish positions, the RIF regulations determine whether an employee keeps their present position or whether the employee has a right to a different position. Being laid off is one of the most challenging situations in any person’s life, so it’s important to prepare early and know your options.
What Is a RIF?
A traditional Reduction in Force is the federal government’s formal way of cutting staff. A RIF usually happens when an agency needs to eliminate positions due to
- Budget cuts: Congress slashes funding, and agencies have to do more with less
- Reorganization: A department restructures, merges, or eliminates roles
- Lack of work: Technology or mission changes make some jobs unnecessary
- Base closures: Military installations shutting down under BRAC (Base Realignment and Closure)
A RIF follows the rules the Office of Personnel Management (OPM) laid out under Title 5 of the Code of Federal Regulations (CFR), Part 351. The agency identifies which positions—or “competitive areas” (like a specific office or location)—are no longer needed. They submit a plan to OPM if required.
Retention Register: The agency creates a list ranking employees in each competitive area based on four factors:
- Tenure: Career employees (permanent) outrank probationary or temporary ones. Veterans often get priority within their tenure group.
- Veterans’ Preference: Vets with service-connected disabilities (30% or more) get top billing, followed by other vets, then non-vets.
- Length of Service: Total creditable Federal civilian and uniformed service. More years equal a higher position on the list.
- Performance Ratings: Employees receive extra retention service credit for performance based upon the average of their last three annual performance ratings of record received during the 4 years before the RIF.
Notification: If your position is cut, you get a specific RIF notice—at least 60 days before the effective date (120 days for DoD employees). This may be shortened to 30 days with OPM approval.
What Happens If You’re RIF’d?
If you are affected by a reduction in force (RIF), you may have many questions about how your retirement benefits will be affected. There are also some potential extra benefits you could be eligible for, such as:
- Separation Incentives: The Voluntary Separation Incentive Payment (VSIP) Authority allows agencies that are downsizing or restructuring to offer employees lump-sum payments up to $25,000 as an incentive to voluntarily separate.
- Rehiring Selection Priority: The Reemployment Priority List (RPL) prevents employees from outside the agency from being employed ahead of agency employees who will be or have been separated by RIF. It provides separated employees with the first opportunity for positions within their former agency. Agencies must have a separate RPL for each commuting area from which eligible employees have been separated by RIF.
- Severance Pay: If you are about to be separated from a permanent position involuntarily and through no fault of your own, you will likely be eligible for severance pay. To be eligible, you must not have refused an offer of a position that is:
- in the same commuting area,
- in the same agency, and
- no more than two grades below your current grade level.
In addition, you must have been employed for at least 12 continuous months, and cannot be eligible for an immediate annuity from a federal civilian retirement system or from the uniformed services. Also, you must not be receiving workers’ compensation benefits for wage loss due to an on-the-job injury.
- Annual & Sick Leave: All civilian employees covered by annual leave laws are entitled to receive a lump sum payment for accrued annual leave when separated from the Federal Government. You will not be paid for unused sick leave. However, if you are separated from the Federal Government you are entitled to have your sick leave restored to your sick leave account if you are reemployed in the Federal Government. Also, unused sick leave will be added to your total service if you are eligible for an annuity
- Unemployment Compensation: The Department of Labor administers the unemployment insurance program for Federal employees through State governments. States, including the District of Columbia, determine the eligibility for benefits and the amounts to be paid to unemployed individuals. The program provides a weekly income for a limited period of time. The laws of the State or jurisdiction determine the amount of benefits and length of time they will be received. If you were separated, you should file a claim for benefits at your State Employment Service office or unemployment insurance claims office. These State offices also allow you to register for potential employment opportunities. You must present your social security card, official notice of separation or non-pay status (Standard Form 50), specific RIF notice letter, and unemployment insurance notice (Standard Form 8). For more information, visit the Department of Labor’s website.
Retirement Options
If you’re eligible for an immediate annuity (e.g. under FERS or CSRS), you can retire instead of separating. Unlike some voluntary options, early retirement penalties do not usually apply in a RIF. Always consult a retirement specialist before taking any action. Learn more about VERA.
Check Eligibility: Could you retire? Qualify for Voluntary Early Retirement under VERA? Take an Incentive Payment (VSIP)? Fill out the form below to schedule your Retirement Consultation with United Benefits to learn about your options and get a free estimate of your benefits.