S. 295: Reducing the Federal Workforce Through Attrition Act

The Reducing the Federal Workforce Through Attrition Act aims to reduce the number of Federal employees across all agencies through attrition rather than layoffs. Here are the key points of the legislation:

Goals of the Act

The bill is designed to limit the growth of the Federal workforce by setting a specific cap on the number of Federal employees. The goal is for the total number of Federal employees not to exceed 90% of the total number as of September 30, 2025, starting in fiscal year 2028.

Definitions

• Agency: Refers to an Executive agency as defined in U.S. law.
• Federal Employee: Refers to employees of the Federal government but excludes political appointees.

Implementation Timeline

• By October 31, 2025, each agency must report its total number of employees as of September 30, 2025.
• By the end of the first quarter of fiscal year 2026, the Office of Management and Budget (OMB) will provide each agency with its maximum allowable employee count to comply with the reduction.

Workforce Reduction Rules

To manage workforce attrition, the legislation sets a "replacement rate" for new hires. From the second quarter of fiscal year 2026 until September 30, 2027, agencies can hire no more than one new employee for every three employees who retire or leave. This aims to gradually reduce the workforce without immediate layoffs.

Monitoring and Compliance

• The OMB Director will continuously monitor agency compliance with these new employee caps.
• If an agency exceeds its maximum allowable number of employees, the Director must notify the agency head and could impose hiring restrictions until compliance is achieved.

Emergency Waivers

In cases of war, national security concerns, or extraordinary emergencies affecting health and safety, the President may waive the rules for specific positions or categories of positions.

Employee Transfers and Contracts

The legislation allows employees to transfer between agencies as long as the receiving agency complies with the new hiring caps. Furthermore, agencies are discouraged from increasing their reliance on service contracts as a way to circumvent the employee cap, unless a cost-benefit analysis demonstrates financial advantages to the government.

Counting Employees

When determining the number of Federal employees, the count must be expressed on a full-time equivalent basis and not be influenced by any collective bargaining agreements.

Relevant Companies

• None found