Labor & Employment Law Daily Wrap Up, AGENCY NEWS—OPM guidance adds practical details to federal RIF overhaul, (Sep 3, 2026)

By Brandi O. Brown, J.D.

New OPM guidance offers agencies detailed instructions, examples, and FAQs on how to implement the new rules.

The Office of Personnel Management’s new guidance on reductions in force does not substantially alter the agency’s recently finalized RIF regulations, but it provides agencies with extensive implementation direction on how to carry out the changes, including worked examples, detailed FAQs, and explanations of new procedures that are only briefly addressed in the rule itself.

OPM issued the memorandum September 2, 2026, the same day its revised RIF regulations took effect. The underlying final rule, published August 3, represents one of the most significant revisions to federal layoff procedures in decades, shifting the retention system toward employee performance and away from tenure and length of service. The guidance package, however, focuses less on announcing new policy and more on helping agencies implement that policy consistently.

The guidance includes a series of attachments explaining how agencies should apply the new rules in practice. While the final rule establishes a framework under which employees are ranked primarily by performance credit, supplemented by veterans’ preference points, the memorandum provides explanations of how those calculations work in practice and how agencies should handle situations such as missing performance ratings.

Retention standing. For example, OPM’s guidance explains how agencies should calculate retention standing when an employee has fewer than three ratings of record within the applicable four-year period. The memo outlines specific formulas for employees with one or two ratings and describes how agencies should use modal ratings when no ratings exist during the lookback period.

The memorandum also includes a calculated retention-standing example showing how employees would be ranked under the new performance-focused system. The example illustrates how performance scores, veterans’ preference points, tenure subgroup status, and service computation dates interact when determining retention order.

Assignment rights. Another area where the guidance expands on the final rule involves assignment rights. The regulations eliminate the longstanding “bump” and “retreat” procedures and replace them with a new assignment-right framework. While the final rule establishes that change, the memorandum further explains how agencies should assess employee qualifications, when a formal qualification analysis is required, and when agencies may rely on exceptions for employees who recently performed substantially the same work.

Competitive-area rules. The guidance also provides agencies with additional direction on using the new competitive-area rules. The final rule permits agencies to define competitive areas using official organizational units or geographic locations and requires OPM approval when agencies establish or materially modify a competitive area within 90 days before issuing RIF notices. The memorandum expands on those provisions with practical explanations of what constitutes a competitive area and how remote employees should be treated for competition purposes. According to the guidance, employees working from approved alternate locations remain assigned to their official organizational unit rather than competing based on where they physically perform their work.

Probationary employees, exclusions. Similarly, the memorandum provides extensive discussion of employee categories that are excluded from RIF competition under the revised regulations. The guidance outlines how agencies may retain or release probationary employees, trial-period employees, Schedule C and Schedule G employees, and certain temporary appointees without conducting traditional retention-standing analyses. It also explains when agencies must still provide written notice to such employees even though they are excluded from competition.

The guidance further addresses procedures for notices, records access, appeals, and transition programs.

OPM also included an attachment to explaining the new procedures governing the abolishment of an entire competitive area.

Timing. In the memo, OPM emphasized that agencies must apply the old regulations to any RIF notice issued before September 2, 2026, while notices issued on or after that date are governed by the revised framework. The agency highlighted that retention standing is generally fixed as of the date an employee receives a specific RIF notice, underscoring the importance of timing as agencies prepare workforce restructuring actions.

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