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The federal government’s Office of Personnel Management sent an email to all federal employees on Jan. 28 informing them that they could choose to resign no later than Feb. 6 and would be “provided with a dignified, fair departure from the federal government” and receive pay through Sept. 30, which is almost eight months of what Americans refer to as severance pay. Many of those who choose to stay will be required to return to a physical office. Voluntary severance programs have a long but mixed history in the private sector. If a company wants to reduce its employee head count by, say, 10%, it might offer severance to a large group or even all employees, with the hopes that enough employees will accept the package to achieve the downsizing goals. The nice thing is that these programs are voluntary.
The downsides to employers are somewhat obvious: (1) What if too many employees accept the package, or too few? And (2), what if experienced employees with critical institutional knowledge accept the package? If too few accept the offer, sometimes companies increase the offer. This can lead to employees waiting to see if a better deal is announced. The use of voluntary severance packages in the private sector is not nearly as common as it used to be, from my perspective as an employment law attorney. In most reductions in force these days the employer chooses who will be laid off.
My assumption is that employers have become way too data-driven to use the old-fashioned, clumsy approach of offering severance to everyone and hoping the “right” employees accept and the “right” employees stay. Which brings us to the federal government. This offer applies to “all” federal employees. Whether that includes military personnel and U.S. Post Office employees is a bit fuzzy, but the answer is probably no. But even the federal government is subject to contract law — if it makes an offer and there is an acceptance, it will be required to make good on the contract. If 5% of the approximately two million federal civilian and nonpostal service employees accept, there will be about 100,000 folks looking at early retirement or for a new job this spring. We’ll see how this plays out.
V. John Ella, Robbinsdale
The writer is an employment law attorney.
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