OPM updates guide for calculating severance pay

The Office of Personnel Management updates its guide for calculating severance pay. Its release comes on the heels of agency efforts to examine how they can red...

As agencies consider how they’ll reorganize and — in some cases — scale back their workforces to meet the Trump administration’s budget priorities and recent restructuring push, the Office of Personnel Management has an update to its severance pay estimation guide.

The worksheet is designed to help agencies calculate an employee’s severance pay based on age and length of service. Full-time and part-time employees are eligible to receive severance pay if they’ve served for at least 12 continuous months and were involuntarily separated from their positions, other than a firing for poor performance or misconduct.

Severance pay consists of:

  • One week of pay at the basic rate for the position that the employees held at the time of separation for each full year of creditable service through 10 years.
  • Two weeks of pay at the basic rate for the position that the employee held at the time of separation for each full year of creditable service beyond 10 years.
  • 25 percent of the other applicable of amount for each full three months of creditable service after the final first year.

Most career or career-conditional employees in the competitive or excepted service are eligible to receive severance pay. Most presidential appointees are not.

The Office of Management and Budget’s recently released plan to reorganize the federal government and restructure the workforce said agencies should take near and long-term steps to reduce the size and cost of the federal workforce.

OPM’s update comes as agencies examine their own functions, offices and personnel and prepare to submit agency reform plans to OMB. Though neither OMB’s plan nor President Donald Trump’s executive order on government reorganization detail specific personnel cuts, workforce reductions at most agencies will be tied to the coming fiscal 2018 budget.

Agency heads also recently received a new workforce reshaping guide and an updated reference on implementing administrative furloughs.

The guidelines are meant to help agencies “considering and/or undergoing some type of reshaping (e.g., reorganization, management directed reassignments, furlough, transfer of function, reduction in force),” OPM said last month.

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