Government Shutdown Looms: OPM Clarifies Agency Firing Powers Amid Budget Standoff

With the federal government on the brink of a shutdown, the U.S. Office of Personnel Management (OPM) has issued critical guidance clarifying that agencies possess the authority to terminate employees if Congress fails to pass a funding deal by the end of the fiscal year. This directive, detailed in a 65-page guide released on September 28, outlines that agencies may proceed with reduction-in-force (RIF) memos during a lapse in appropriations, classifying the resources needed for layoffs as essential operations.

Administration officials have determined that agencies are permitted to direct employees to perform work necessary to administer the RIF process, deeming these as ‘excepted activities’ even during a shutdown. This stance significantly raises the stakes in the ongoing budget negotiations, moving beyond traditional furloughs to potential outright firings, which could have more severe and lasting impacts on the federal workforce and government operations.

The federal government is set to cease non-essential operations on October 1 if a congressional agreement on appropriations is not reached. This development follows a recent OMB memo instructing agencies to identify programs funded through discretionary spending, indicating that these would no longer be ‘statutorily required to be carried out’ in the event of a shutdown.

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