Agencies Use Buyouts, Early Outs to Avoid Potential Layoffs or Furloughs

Many federal agencies are turning to buyouts or early outs to save money so they can avoid potential layoffs or furloughs due to budget cuts in fiscal year 2012. Since the beginning of the year, 13 agencies have offered buyouts and early outs to their employees or sought authority from the Office of Personnel Management. Two other agencies are currently considering offering the incentive.

"For most agencies, we're not seeing huge numbers, relatively speaking, but clearly going into the next fiscal year that could change," said John Palguta, vice president of policy at the Partnership for Public Service.

The current buyout and early out trend affects tens of thousands of employees from agencies across government.

Employees eligible for a Voluntary Early Retirement Authorization (early out) need to have at least 20 years of federal service and be at least 50 years of age, or can be any age with a minimum of 25 years of service. Those eligible can be under the Civil Service Retirement System or the Federal Employees Retirement System. Buyouts, or Voluntary Separation Incentive Payments, are cash incentives of up to $25,000 for each employee and can be offered with an early out.

"Buyouts are better than [reductions in force] and furloughs, and I think they are better for the agency also," said Saul Schniderman, president of the Library of Congress Professional Guild, American Federation of State, County and Municipal Employees Local 2910. Schniderman's guild represents 1,500 Library of Congress employees. Recently, the Library of Congress reached an agreement to offer buyouts and early outs to 350 employees this fall.

In addition to the Library of Congress, other agencies currently offering buyouts and early outs to their employees include: the Departments of Agriculture, Commerce, Education, Housing and Urban Development and Justice, as well as the Air Force, the Federal Trade Commission, the Government Accountability Office, the Government Printing Office, the Nuclear Regulatory Commission, the U.S. Postal Service and the Smithsonian Institute. In addition, the Bureau of Alcohol, Tobacco, Firearms and Explosives and the Department of Health and Human Services are considering separation incentives. In most cases, the incentives are offered to select offices and employees in each agency and are not effective agencywide.

The last time federal agencies used buyouts and early outs heavily was during the reinventing government initiative by former President Bill Clinton. In the 1990s, agencies used the incentive as part of an overall initiative to make government more streamlined and efficient.

Posted in General News

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