What Is a Reduction in Force (RIF) and How Can You Prepare For It?

Whenever there is a change in leadership within the White House, it’s common for the new President to review how various agencies run and make changes to the staffing. This is no different under the current administration. In the past few months, President Trump has made changes to the resources and funding to various federal agencies, and more are expected with the upcoming federal budget reviews.

Many federal organizations have reached out to the Office of Personnel Management to discuss best practices for a reduction in force or RIF. If your agency is planning an RIF, keep reading to learn about the process, your options, and the benefits you are owed.

What Is an Reduction in Force (RIF)?

A reduction in force occurs when an agency needs to remove or adjust positions. For example, if an agency has two or three people in one role, it might look to remove one of the people in the current position. Other roles might be consolidated in order to cover the job duties of terminated employees.

There are a few common reasons why federal agencies might enact at RIF, including:

• Technology has made certain roles obsolete.
• Changes are made to streamline the organizational structure.
• Budget and resource allocations are cut, mandating reductions in staff.

Not all RIFs are the result of directives from the executive branch, but many are difficult for agencies who have to let go of employees who have served in the company for several years.        

How Does a RIF Compare to Other Forms of Termination?

The Society for Human Resource Management explained the difference between a RIF, furloughs, layoffs, and other forms of termination. Often, this vocabulary is used interchangeably, even though the terms mean drastically different things. In summary:

• A furlough is used as an alternative to a layoff, where employees are required to work fewer hours or take time off.
• A layoff is meant to be a temporary loss of employment. Companies lay off employees when they plan to rehire them in the future.
• A reduction in force (RIF) either refers to permanent terminations or the process of temporary layoffs becoming permanent.

During the recession in 2009, some organizations cut employee hours or days in the form of furloughs in order to help them keep at least some of their income. Others laid off employees with the idea that once the economy improved, they would hire them back. Even though the recession is over, some organizations never rehired employees for those positions. This is a reduction in force, where the company is able to grow even without bringing back old positions.

Is Severance Pay Offered to Employees During a RIF?

The Office of Personnel Management has clear guidelines for severance pay during a reduction in force. This criteria will cover most, if not all, positions. Your unique position within the federal government may qualify or disqualify you for severance benefits.

As a general rule of thumb, employees qualify for severance if:

• They have completed at least 12 months of service within an agency.
• They have been forcibly removed from their position for reasons other than performance.

Employees who have been fired for performance, attitude, or other reasons do not qualify for severance pay, along with employees who are offered and decline different positions within an organization.

This past addendum is critical when learning about severance options. A reduction in force might lead to a strategic restructuring within an agency. Employees might be offered different positions if their current one is made redundant. If an employee rejects that offer to keep working within the organization, he or she forfeits their claim to severance pay.

What Happens to Your Benefits During an RIF?

Employees who take an lower position during a RIF and are downgraded in pay and hours are still able to retain their higher federal benefits. This typically includes pay, retirement, life insurance, eligibility for training, and noncompetitive promotions. These benefits, for the most part are indefinite, at least until future RIFs.

The benefits for downgraded employees is relatively easy compared to the benefits for terminated employees. While these vary by position, there are federal standards that most positions fall under:

• Employees typically receive a lump sum for their accrued unused annual leave, but do not receive payment for unused sick leave.
• Employees will typically continue to receive health coverage for 31 days after separation. You can apply for extensions, but are required to pay your part and the government’s part of the insurance cost, along with a 2% fee (so 102% total). This temporary extension only lasts for 18 months.
• Coverage of FEGLI life insurance will last 31 days after separation.
• Retirement benefits vary depending on your time within the government and time that you started working. These benefits are reviewed on a case-by-case basis to determine eligibility for payouts or refunds.

What Can You Do During an RIF?

If you’re worried that your agency is going to start a RIF, or if you have already encountered one, call the team at MyFedBenefits to learn about your options.

One of our benefits specialists can review your specific case to determine what you’re owed and come up with plans to maintain your financial stability through this tumultuous time.  Contact us today.