Homeland Security leaders win broad power over civil service rules

Civil service laws governing pay and promotions, job classification, collective bargaining, performance appraisals, discipline and firing will not apply to the 170,000 employees of the new Homeland Security Department under the homeland legislation approved by Congress this week.

But the department's employees will be covered by some civil service laws, including those governing basic employment rights such as veterans preference; attendance and leave; training, insurance and retirement; anti-discrimination complaints; Senior Executive Service rules; travel policy; whistleblower rights; and merit principles.

Instead of completely wiping out civil service coverage, the legislation gives power to the leaders of the new department to set up new procedures in a few key human resources areas. Those new procedures are likely to mirror similar changes made over the years in other agencies exempted from portions of the law, including the Internal Revenue Service and the Federal Aviation Administration.

"For the last 12 or 15 years of my own career I worked in excepted service organizations," said Myra Howze Shiplett, director of the National Academy of Public Administration's Center for Human Resources Management. "For the most part, the notions of merit principles and fair treatment are so ingrained in the federal system that there were relatively few times when a manager or an executive or a supervisor took inappropriate advantage of the flexibilities. In many ways, they lean the other way because they knew it was an excepted service. That doesn't mean there isn't always an idiot somewhere. But you deal with the specific situation, you don't change the whole system because you have one person who has terrible judgment."

Concerns about civil service protections, particularly those governing collective bargaining, held up passage of the homeland security bill in the Senate until after the Republican gains in the Nov. 5 elections. Democrats and unions representing federal employees fought passage of the bill on the grounds that reducing civil service protections could lead to politicization of the new Homeland Security Department. Union leaders also fear that the Bush administration will use the new flexibility in collective bargaining to weaken or eliminate unions.

"What I'm waiting for right now is to find out what it is [the Bush administration] intends to modify or eliminate from the six areas that it was given the authority to do so," said Colleen Kelley, president of the National Treasury Employees Union. "Employees are very concerned. It may be for some employees simply the known versus the unknown. They know what the rules are today; they don't know what they'll be in the new department."

Civil service rules are laid out in Title 5 of the United States Code. The homeland security legislation creates a new chapter in Title 5 dealing with the new department's human resources system.

The legislation calls on the new department's leader, in consultation with the Office of Personnel Management, to come up with a system that is "flexible" and "contemporary" and that upholds merit system principles, such as fitness for duty and nondiscrimination, laid out elsewhere in Title 5.

The legislation also instructs the new department's leader to consult with employees and employee organizations on the creation of the new system.

Moreover, the legislation lists sections of Title 5 that the new department must abide by, including those dealing with standard federal benefits and basic employment rules.

Unions had pushed for guarantees in the legislation that would keep the president from dissolving unions at the new department. The legislation doesn't go that far, but the bill does make it a little harder for the president to deny collective bargaining rights to employees who are already members of unions, setting up a more stringent standard than under the law that governs most federal employees. The president must also explain to Congress his plans to eliminate bargaining rights in some cases. At most non-Homeland Security agencies, the president can simply eliminate bargaining rights on national security grounds without explanation.

Despite such limitations, the leaders of the new department have the freedom to ignore civil service law in the areas of pay and promotion; performance appraisals; job classification; collective bargaining; adverse personnel actions, such as suspensions; and the appeals processes for resolving workplace disputes.

The Homeland Security Department can set up new procedures in each of those areas, although it could also opt to stick with standard federal practices. The new department's leaders and OPM are likely to move to a system of broad pay bands for, at the very least, senior- and mid-level managers; develop a performance appraisal system that gives fewer outstanding ratings; simplify the job classification process; and reduce the time it takes to fire people.

Employees of the new department will not be guaranteed the right to appeal firings and other actions (except in whistleblower cases) to the Merit Systems Protection Board. But the Bush administration could decide to leave that right intact.

"We continue to support and advocate MSPB appeal rights for employees," said Didier Trinh, legislative director for the Federal Managers Association. "That's an essential tenet of any personnel system."

The details of the new department's personnel system will start to come together in the next few months. OPM, for example, must submit a plan to Congress within 90 days of enactment of the bill on options for simplifying the complex array of compensation packages available to employees of the 22 agencies that will become part of the new department.

An OPM spokesman said agency officials would not comment on the homeland security legislation until after Congress finished making technical corrections to the bill.

It's likely that many of the features of the Homeland Security personnel system will mirror those tested elsewhere in government. The IRS, for example, has set up a pay-banding system for its managerial corps. Ron Sanders, the architect of that system as chief human capital officer at the IRS, was appointed this week to head the policy development division at OPM.

John Kamensky, director of the managing for results practice at IBM Business Consulting Services, said managers and employees should not let their fear of change get the better of them. "These kinds of flexibilities have been given to the FAA and IRS and others. It's not like there's been a great deal of abuse or a lot of changes that have diminished rights. It shouldn't be seen as scary."

The NTEU's Kelley is reserving judgment.

"I'm willing to wait for the specifics," she said. "If I'm wrong about the negative things they might have in mind, then I don't like being wrong, but in this case, I hope I'm suspicious for no reason and that everything they want to do is good for the employees as well as the agency and the country. At this point, morale of those employees is not in a good place."

Homeland Security Civil Service Rules

The table below shows which parts of civil service law in Title 5 of the United States Code apply to the new Homeland Security Department, and which were waived.

Provision Applies or waived
MSPB appeal rights Waived
Merit systems principles Applies
Whistleblower protection Applies
Basic employment rules (e.g., veterans preference) Applies
Rule of three hiring rule Waived
Senior Executive Service Applies
Reduction-in-force procedures Applies
Training rules Applies
Performance appraisal system Waived
Incentive awards Applies
Personnel demo authority Applies
Job classification Waived
Pay rates and systems Waived
Payroll administration Applies
Travel rules Applies
Special allowances (e.g. for overseas duty) Applies
Attendance and leave Applies
Labor-management relations Waived
Antidiscrimination Applies
Political activity limits Applies
Gift limits Applies
Drug use policy Applies
Adverse action procedures Waived
Appeal rights Waived
Work-life and safety services Applies
Injury compensation Applies
Insurance and retirement benefits Applies
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