Federal Civil Service Changes Could Reshape Layoff Rules and Job Protections

New U.S. Office of Personnel Management proposal and ongoing lawsuits could weaken federal workforce protections and alter how layoffs and appeals are handled.

Mar 06, 2026

On March 5, 2026, the U.S. Office of Personnel Management published a proposed rule that would change how federal agencies conduct layoffs and how affected employees appeal those decisions. The proposal appeared as a notice of proposed rulemaking in the Federal Register, initiating a formal rulemaking process that could alter long-standing civil-service procedures.

The rule would place greater weight on performance evaluations when agencies determine the order of layoffs. It would also change where federal employees can challenge those decisions. Instead of appealing primarily through the independent Merit Systems Protection Board, the proposal would shift key parts of the review process to the Office of Personnel Management itself.

At the same time, federal employee unions have filed legal challenges to a broader personnel initiative known as Schedule Policy/Career, a classification system that could convert tens of thousands of federal career employees into positions that can be terminated at will.

Taken together, these actions form part of a series of changes to the federal civil service that have unfolded over the past several years. Each change moves authority over hiring, classification, and termination decisions closer to the executive branch.

For Kentucky residents, the consequences are not abstract. Federal agencies operate offices, facilities, and administrative systems across the state. Veterans’ hospitals, Social Security processing centers, weather forecasting operations, tax enforcement offices, and labor-standards investigators all depend on a professional civil service designed to function independently of political leadership.

Changes to those guardrails alter how those institutions operate.

The March 5 OPM Layoff Rule Proposal

The proposed rule issued by the addresses a process known within federal personnel law as a Reduction in Force, or RIF. Federal agencies conduct a RIF when budget cuts, reorganizations, or policy decisions eliminate positions.

Under current rules, agencies determine layoff order using a formula established under the federal civil-service statute in Title 5 of the U.S. Code. The formula considers several factors:

tenure group
veteran preference
length of federal service
performance ratings

Length of service historically plays a major role in this calculation. Long-serving employees with strong performance histories generally receive higher retention priority during layoffs.

The March 5 proposal would rebalance that formula. It would give greater weight to performance ratings relative to years of service.

In practical terms, this means agencies would have greater flexibility to lay off employees with long tenure if their performance ratings fall below those of colleagues with shorter service records.

The rule would also alter the appeals structure for those layoffs.

Federal employees who believe a RIF decision violated the law traditionally appeal to the , an independent quasi-judicial body created by Congress in the Civil Service Reform Act of 1978. The board hears cases involving disciplinary actions, whistleblower protections, and improper personnel decisions.

Under the new proposal, key elements of the layoff appeal process would shift toward administrative review inside the Office of Personnel Management itself.

This change modifies the institutional structure of oversight. An independent review body would play a smaller role in adjudicating disputes over layoffs carried out by executive agencies.

The Role of the Merit Systems Protection Board

To understand the significance of this shift, it helps to look at the role the plays in the federal personnel system.

The board was created during the post-Watergate civil-service reforms of the late 1970s. Congress designed it to act as an independent safeguard against political interference in the federal workforce.

Its core responsibilities include:

hearing appeals from federal employees challenging disciplinary actions or layoffs
enforcing merit-system principles
protecting whistleblowers
issuing decisions that interpret federal personnel law

Administrative judges within the board conduct hearings and review documentary evidence before issuing decisions. Those rulings can then be reviewed by the full board and, if necessary, by the federal courts.

Because the board operates independently from executive agencies, it provides a structural check on personnel decisions made by political appointees or agency leadership.

Shifting appeals toward administrative review within the Office of Personnel Management alters that institutional balance. The same agency responsible for issuing federal personnel regulations would gain a larger role in reviewing disputes arising from those regulations.

In administrative law, this kind of shift changes how oversight functions within the executive branch.

Schedule Policy/Career and the Classification Fight

While the proposed layoff rule moves through the rulemaking process, a separate policy initiative remains under litigation.

That initiative involves a job classification known as Schedule Policy/Career. The classification framework was created through executive action and expanded through personnel regulations administered by the .

Schedule Policy/Career allows agencies to designate certain positions as policy-influencing roles rather than traditional career positions.

Employees placed in this category would no longer receive the full set of civil-service protections that apply to most federal workers. The classification would allow agencies to dismiss employees more easily and with fewer procedural protections.

Federal employee unions argue that the classification could apply to roughly 50,000 federal positions.

Several unions, including the American Federation of Government Employees, have filed lawsuits challenging the legality of the classification. The lawsuits argue that the executive branch lacks authority under federal personnel statutes to convert career civil-service roles into at-will positions without congressional approval.

Those cases remain active in federal court.

The litigation focuses on statutory interpretation. Plaintiffs argue that the Civil Service Reform Act established specific categories of federal employment and that the executive branch cannot create a new category that removes merit protections.

The administration argues that the executive branch retains authority to designate policy-making roles that require political alignment with agency leadership.

Courts will ultimately decide whether the classification complies with federal law.

A Pattern of Civil-Service Restructuring

The proposed layoff rule and the Schedule Policy/Career litigation both fall within a broader sequence of civil-service changes that have occurred over several years.

That sequence includes:

executive orders directing agencies to review positions for policy influence
new personnel regulations expanding the ability to reclassify certain roles
proposals to modify disciplinary procedures and appeal rights
changes to layoff formulas and review processes

Each of these actions relies on existing statutory authority in federal personnel law. None of them require new legislation from Congress.

Instead, they use administrative rulemaking, classification authority, and internal executive procedures to reshape how the federal workforce is managed.

This approach follows a familiar pathway in administrative governance. Federal statutes often grant broad regulatory authority to executive agencies. Agencies can then interpret those statutes through regulations and personnel policies.

The current series of actions uses that authority to shift how merit protections function in practice.

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How Federal Personnel Changes Reach Kentucky

Federal civil-service policies shape the operation of institutions across Kentucky.

Thousands of federal employees work in the state. Some serve in visible facilities such as veterans’ hospitals and federal courthouses. Others work in regional administrative offices that process benefits, enforce labor laws, or manage environmental programs.

Several examples illustrate how these systems intersect with daily life.

The U.S. Department of Veterans Affairs operates major medical centers in Louisville and Lexington that serve veterans throughout Kentucky and surrounding states. These hospitals rely on a workforce of physicians, nurses, technicians, and administrators employed under federal civil-service rules.

The Internal Revenue Service maintains operations that process tax filings, investigate fraud, and administer federal tax credits. Many Kentucky residents interact with these systems during tax season or when claiming benefits.

Weather forecasting services provided by the National Oceanic and Atmospheric Administration rely on meteorologists and technicians stationed across the region. Their forecasts support emergency management planning during severe storms, which occur frequently in Kentucky.

Labor enforcement agencies such as the U.S. Department of Labor investigate wage violations, workplace safety complaints, and labor-standards disputes involving Kentucky employers.

Each of these agencies depends on a professional workforce governed by federal personnel rules.

Changes to those rules affect how employees are hired, evaluated, disciplined, and retained.

Operational Consequences for Public Services

Civil-service protections exist for operational reasons as well as legal ones.

The federal personnel system developed over more than a century as Congress attempted to move government employment away from patronage systems in which political loyalty determined who held public jobs.

Merit-based hiring and independent review procedures were designed to produce a stable workforce capable of carrying out complex administrative programs.

When those protections change, agencies experience shifts in how personnel decisions are made.

Managers gain greater discretion in hiring and termination decisions. At the same time, employees may perceive greater risk in challenging agency leadership or raising internal concerns about policy implementation.

These dynamics influence institutional behavior.

Employees working in benefits processing centers may become more cautious about decisions that could conflict with agency leadership. Regulatory investigators may encounter greater pressure when enforcing rules against politically sensitive industries.

These effects develop gradually through internal management culture rather than through any single directive.

Over time, however, personnel structures shape how institutions operate.

What Happens Next

The March 5 layoff proposal from the now enters the formal federal rulemaking process.

Under the Administrative Procedure Act, the agency must publish the proposed rule in the Federal Register and allow the public to submit comments during a designated comment period. Agencies review those comments before issuing a final rule.

Once finalized, the rule could take effect on a specified implementation date unless Congress intervenes through legislation or the Congressional Review Act.

Meanwhile, litigation over the Schedule Policy/Career classification continues in federal court. Judges will evaluate whether the classification complies with existing federal personnel statutes.

Those rulings could determine how far the executive branch can go in redesigning the civil-service system without congressional approval.

For Kentucky residents, the outcome of these proceedings will shape the administrative systems that deliver federal services across the state.

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