Trump's Federal Worker Buyout Isn't a Buyout. It's a Deferred Resignation

(Bloomberg) -- An email from the Trump administration encouraging federal government workers to resign has caused confusion among agency employees and the public. The missive offered workers a “deferred resignation program,” under which those who choose to opt in would retain their full pay and benefits through September. They also would be exempt from the government-wide return-to-office mandate.

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Many headlines have called the offer a buyout. But that’s not accurate, said Betsey Stevenson, a professor at the University of Michigan and former chief economist of the US Department of Labor. A buyout is typically a lump sum paid to departing employees who, upon their voluntary resignation, give up access to the organization’s information and systems and cease working for their now-former employer. That’s not what’s happening here, she said.

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“If you submit your resignation, you can feel guaranteed that you'll not be fired before September. I don't think that you can be guaranteed that you won't be working,” Stevenson said. That’s because the language in a government FAQ page about the offer, and the offer itself, leave the door open.

Understanding the exact terms of the agreement is important for the hundreds of thousands of federal employees who must decide by Feb. 6 whether to accept the offer, or to stay on without the assurance that their position or agency will be maintained.

Differing Details

On the FAQ page from the US Office of Personnel Management, the first question is about whether employees who opt in are expected to work before their resignation takes effect. The page says no: “Except in rare cases determined by your agency, you are not expected to work.”

But the templated resignation letter employees were invited to sign takes a looser approach. It reads in part:

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I understand my employing agency will likely make adjustments in response to my resignation including moving, eliminating, consolidating, reassigning my position and tasks, reducing my official duties, and/or placing me on paid administrative leave until my resignation date.

I am committed to ensuring a smooth transition during my remaining time at my employing agency. Accordingly, I will assist my employing agency with completing reasonable and customary tasks and processes to facilitate my departure.

Meanwhile, a third source of information, a memo from OPM Acting Director Charles Ezell to heads of federal departments and agencies, says that employees who accept the deferred resignation offer “should promptly have their duties re-assigned or eliminated and be placed on paid administrative leave until the end of the deferred resignation period ... unless the agency head determines that it is necessary for the employee to be actively engaged in transitioning job duties, in which case employees should be placed on administrative leave as soon as those duties are transitioned.”

Ultimately, how many people will be asked to keep working through their deferred resignation period would likely depend on how many people resign, Stevenson said. “If the entire Social Security team resigned and there was nobody to send out checks, I bet they'd make them do the work,” she said.

The president of the National Treasury Employees Union, Doreen Greenwald, said in a statement that the OPM documents “lack clarity about the exact terms of the offer, making it unreliable. We also question whether OPM has the legal authority to use a ‘deferred resignation’ to put people on extended administrative leave under these circumstances.” The union urged federal employees to reject the deferred resignation offer.

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‘Words Matter’

Though workers who take the offer of a deferred resignation will technically still be employed by the government through September, the FAQ page says this shouldn’t bar them from accepting another job. “Nothing in the resignation letter prevents you from seeking outside work during the deferred resignation period,” the page says. But there may be exceptions. As the FAQ notes: “You should ask your agency's human resources team about what restrictions, if any, exist for employees who have resigned but remain employed (including on administrative leave) by their employing agency.”

Ogletree Deakins labor and employment attorney James Plunkett said a lot more clarity is needed. While the offer letter makes the arrangement appear less like a buyout, the FAQ makes it look more like one. Either way, Plunkett said he wouldn’t call it a buyout.

“As an attorney, words matter. It makes me nervous when you see politicians calling it a buyout,” he said. “I always go to the text, and they're calling it deferred resignation. So that's what I would call it.”

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