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Major Changes to Federal Separation Pay and Hiring Tucked Into Senate Defense Bill

Measure would dramatically expand direct hire authority and give employees better incentives to leave federal service.

The Senate on Thursday advanced a measure that would dramatically alter the federal hiring process and permanently boost the maximum buyout agencies can offer their employees.

The hiring changes included in the Fiscal 2019 National Defense Authorization Act stem from a bill a Senate panel cleared last year to enable the expedited hiring of applicants with college degrees. The provision would allow agency heads to circumvent normal hiring restrictions to bring on university students or those who have recently completed their studies. The agency leader could appoint a “qualified individual” to any competitive service, professional or administrative position at the level of GS-11 or below.

Agencies would still be required to adhere to merit system principles and the appointments could not make up more than 15 percent of the number of similar jobs filled in the previous year. Current students appointed under the new authority would serve on a temporary basis, but their agency head could hire them to a permanent position upon their graduation. The Office of Personnel Management would be responsible for creating regulations for the new law and agencies would report annually on their use of the authority.

Another governmentwide provision in the Defense authorization measure would enable agencies to pay up to $40,000 to employees opting to participate in a Voluntary Separation Incentive Program offer. That would mark an increase from the current maximum of $25,000, which has been the limit since Congress created VSIP in 1993. The Defense Department has maintained a carve-out to offer buyout recipients up to $40,000 for the last two years.

A Senate panel unanimously approved a similar provision as a standalone bill last year. The White House has pushed Congress to adopt the increase. Several agencies offered buyouts to a wide swath of employees in the first year of the Trump administration, but Congress has since placed significant restrictions on those downsizing efforts.

Going forward, the NDAA would index the maximum buyout to inflation.

Several personnel provisions in the NDAA would apply only to the Defense Department:

  • The Pentagon would no longer have to seek approval from OPM’s qualification review boards for its Senior Executive Service appointments, instead providing the secretary unilateral authority to elevate employees to the top career civilian jobs. Defense would be capped at 50 such appointments per year, and the authority would sunset after two years.
  • The measure includes several provisions to create new or extend direct hire authorities for science, technology, engineering and mathematics positions.
  • The measure would continue direct hire authority for financial management experts.
  • Also significant in the Senate NDAA is what is not in it: the measure includes no language requiring the Pentagon to slash its back-end offices. The House version of the bill would result in 25 percent cuts to departmentwide activities such as such as logistics, human resources, services contracts and real property management, while eliminating Washington Headquarters Services entirely.

The Senate on Thursday easily cleared a procedural hurdle to move the NDAA forward with a 92-4 vote. It is expected to move to final passage on Monday. If it clears the chamber, the House and Senate would then move to conference to hammer out the differences between their bills.

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