New OPM Layoff Rules Put Performance Ahead of Seniority as Schedule Policy-Career Lawsuits Wait for a Ruling

On 2 September a new Office of Personnel Management rule on reductions in force took effect. When agencies lay off staff, performance ratings now count ahead of tenure and length of service in deciding who stays. Under the old rules, which dated back decades, seniority and veterans’ preference weighed most. Companion rules move layoff appeals from the Merit Systems Protection Board to OPM itself.

The next round of federal layoffs, if there is one, will run under these rules. Four unions have sued over the companion rules in federal court in California.

The workforce so far

The federal civilian workforce fell from about 2.31 million in September 2024 to about 2.04 million in January 2026, a drop of 12%, according to OPM data. More than 317,000 people left in 2025 and about 68,000 were hired. OPM says more than 92% of 2025 departures were voluntary, mostly deferred resignations, buyouts and retirements.

Layoffs were fought in court. A district judge in San Francisco blocked layoffs at 22 agencies in May 2025. The Supreme Court lifted that block in July 2025, though one concurring justice noted that individual plans could still be challenged. In December 2025 the same judge ordered agencies to rescind layoffs carried out during the shutdown, and the government dropped its appeal.

OPM itself shows the scale. GAO found in July that OPM shrank 35% between December 2024 and March 2026, losing 1,052 people.

Schedule Policy-Career

The other big change is the new category of political-leaning career jobs. OPM’s final rule creating Schedule Policy-Career took effect in March 2026. Employees in it can be fired more easily, without the usual performance procedures or appeal rights. In June the President moved about 8,000 positions into the schedule, mostly at GS-15 and above. On 18 September OPM proposed a follow-up rule under which converted employees wouldn’t serve a trial period but would need two years of service to gain competitive status. Comments are due 17 November.

The legal challenges, brought by the National Treasury Employees Union, other unions, whistleblower advocates and federal retirees, argue the schedule violates the Civil Service Reform Act and due process. None has produced a ruling yet.

Unions

A separate March 2025 order ended collective bargaining at most federal agencies on national security grounds. The courts are split. The Ninth Circuit lifted a nationwide injunction in February 2026. The First Circuit in May let stand an order restoring the Veterans Affairs Department’s contract with its largest union. The D.C. Circuit has heard argument and hasn’t ruled. The Federal Labor Relations Authority ruled in September that it lacks jurisdiction over some excluded Defense Department units.

Why it matters

Together the rules change what a federal job is. Performance-based layoffs reward ratings, which managers control. Schedule Policy-Career puts senior career staff closer to political appointees. And appeals moving to OPM puts the rule-maker in charge of hearing complaints about its own rules. Supporters say this makes the government easier to manage. Critics say it makes the civil service easier to politicise. Congress, which wrote the 1978 civil service law, hasn’t weighed in.