2017 Federal HR Outlook

Here are some of the possible issues that are likely to come up in the new administration, sure to have an effect on the work of the Federal HR community.  The issues identified here will require Congressional action, however; the past month has been an indicator that the Republican-led Congress intends to support President Trump by pushing through legislation to codify his campaign promises and proposals. Needless to say, things are going to get interesting for HR shops.

Increased DoD budget–everyone else’s may go way down.

In his campaign, Trump called for 90,000 more Army soldiers, 18,000 more Marines, a 350-ship Navy, 100 more fighters, and strengthened nuclear and missile defenses. This is likely to translate into a windfall of funds for the Defense budget. Like most things, money is a finite resource, and funds for the increased budget will need to come from somewhere. With all of the fiscal hawks in the Republican Congress, increased budget deficits will probably not be a popular option, the more likely scenario is cuts to the budgets of other Federal agencies and programs.

One such example of this budgetary approach came on the campaign trail and throughout the post-election transition. President Trump and his team have called for slashing the Environmental Protection Agency (EPA) workforce by about half. However, Don Benton, White House liaison for the Trump administration to the EPA, recently reached out to EPA employee’s to deliver a message of support from the Administration for the work that they do. Time will determine the administration’s approach to funding a larger military.

What does this all mean for the Department of Defense (DoD) civilian workforce? Well, the National Defense Authorization Act for fiscal year 2016, called for a 25% reduction of positions in major DoD Headquarters Activities (MHA), to mirror the reductions of Active Duty service members. DoD components and agencies may see a reversal of that congressional directive to support a larger military force under President Trump.

Possible Reduction in Federal Employee Rights, Pay, and Benefits

In July 2016, The Heritage Foundation, a conservative think tank, based in Washington D.C., published a policy agenda titled “Blueprint For Reform, A Comprehensive Policy Agenda for a New Administration in 2017.” The report laid out a conservative vision for the federal workforce and put forth policy proposals to achieve that vision. We mention this report because, according to a CNN article, President Trump’s transition team included key Heritage personnel, and it was “suspected the heavy involvement from key Heritage personnel shows that his think tank will have a strong influence on Trump” and by extension, the Republican Congress. If you haven’t seen the report, it’s worth taking a look. Here are the cliff note version of some of the proposed reform’s that caught our eye:

  • Three-year probationary period: The Heritage Foundation is calling for an increase from 1-year probationary periods to a 3-year probationary period for newly hired federal workers. Congressional GOP members have been trying to submit legislation to amend Title 5 and increase the probationary period to two-years. In September 2016, DoD released an announcement that new employees hired by the department and it’s components would be subject to a 2-year probationary period, the new policy was backdated to November 26, 2015. Although a 3-year probationary period may be unlikely, we anticipate Congressional attempts to increase the probationary across the executive branch.
  • Possible reduction of appeal rights, and possible elimination of PIP Requirement: The Heritage Foundation’s report authors make note that “beyond the probationary period, federal employees receive civil service protections that make firing federal employees extremely difficult.” To counter those protections, the group proposes; 1)  reducing the forum’s available to employee’s to appeal a removal from three to one. 2) Lowering the burden of proof needed to remove an employee from “’a preponderance of evidence’ to ‘substantial evidence’ and from the requirement of proving that dismissing the employee will improve the performance of the agency to showing that it is not unreasonable to assume that firing the employee will improve performance.” Lastly, the Foundation calls for 3) expediting the dismissal process for employee for specific criteria (i.e. efficiency of the service, danger to national security, and negligence or dereliction of duty).
  • Changes to Within-grade Increases (WIGI’s), leave accrual rates, and retirement benefits: “A Heritage Foundation study found that federal employees receive 22 percent higher wages, on average, than similar private-sector employees receive.” It should be noted that the Federal Salary Council (FSC) has reached a different conclusion. The FSC has concluded that federal employees will be underpaid by 34.92 percent in 2017, and 34.07 percent in 2018, on average. None-the-less, the Heritage Foundation calls for the U.S. Office of Personnel Management (OPM) to align with federal pay with private-sector pay levels (per their research findings). They proposed several approaches to achieve this; 1) reduce WIGI amounts from approximately “3 percent to about 2 percent,” and 2) the removal [by Congress] of the automatic nature of WIGI’s (to include limiting “the requirement that managers develop a time-consuming Performance Improvement Plan (PIP) for all employees that do not receive step increases and should limit the scope of appeals for employees who do not receive step increases to within the agency as opposed to an outside forum). The foundation also calls for a reduction in leave accrual rates for Feds through the combination of annual and sick leave rates into a single Paid Time Off (PTO) bank (16 days for workers with fewer than three years of service and up to 27 days for the longest serving workers). Lastly, the foundation is recommends a reduction in government contributions to the pension system (FERS) of employee’s with less than 25 years of service; and increase the amount contributed by employees toward their retirement.

These reforms may seem somewhat extreme, yet Feds should be heartened that any such reforms would need Congressional action to be enacted. However, with the GOP at the helm of both the Executive and Legislative branches, it would behoove Feds to be mindful of the direction political winds are blowing.

MSPB Appointments

The bipartisan Merit Systems Protection Board consists of a Chairman, a Vice Chairman, and a Member, with no more than two of its three members from the same political party. Board members are appointed by the President and confirmed by the Senate, and serve overlapping, nonrenewable 7-year terms.

The departure of Chairman Susan Tsui Grundmann last month, resulted in the loss of Board quorum. The Board is unable to act on any petition for review filed until a quorum is restored by the nomination and confirmation of at least one new member. Given the two current vacancies on the Board, we can anticipate President Trump nominating conservative members to fill those spots. Those appointments may or may not manifest themselves in an erosion of employee rights and protections as we begin to see the adjudications of appeals to the full Board.

Mark A. Robbins will be the only member nominated to the board by a Democratic President, however, his term expires March 1, 2018. On January 23, 2017, President Donald Trump designated Mr. Robbins Vice Chairman. Although the President is required to nominate a member of different political party, chances are he’ll be on the lookout for a conservative-leaning nominee.

Labor Relations

Labor relations in the Federal Government has a bleak outlook with the GOP in control of Congress and the White House. According to the Republican Platform 2016:

“The unionization of the federal workforce, first permitted by Democrat presidents in the 1960s, should be reviewed by the appropriate congressional committees to examine its effects on the cost, quality, and performance of the civil service. Union representatives in the federal workforce should not be paid to conduct union business on the public’s time.”

We are likely to see attempts by Congress and the Executive to ‘bust-up’ unions in the Federal sector. Additionally, we have already seen previous attempts by Republican Congresspersons to limit or eliminate the use of official time by employees who are members of a bargaining unit. Those attempts are likely to come back in full-force with the new Congress.

Also, the Federal Labor Relations Authority (FLRA), a quasi-judicial body with three full-time Members who the President appoints for fixed, five-year terms, with the advice and consent of the Senate. Like the MSPB, the “Authority is composed of three members, not more than 2 of whom may be adherents of the same political party.”  The post of Chairman is currently vacant, we can assume President Trump will nominate a conservative candidate to fill the post. Although FLRA members have rotating terms, the terms of the two current members (nominated under President Obama) begin to expire in 2018, and we are likely to see at least two conservative members (who are likely to have anti-union views). Labor Relations specialists will want to pay especially close attention to the rulings coming from the Authority during that timeframe.

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