The shutdown RIF policy that led to thousands of federal employees receiving reduction-in-force notices during the 2025 government shutdown has been formally rescinded. A new settlement with federal employee unions also requires agencies to remove shutdown-related RIF language from their contingency plans and provide advance notice before making certain changes in the future.
What Was Rescinded?
The dispute centered on an OMB memo issued just before the October 2025 shutdown. It told agencies to consider RIFs for programs that lacked alternative funding and were considered inconsistent with administration priorities.
OPM then issued guidance stating that agencies could run RIF procedures during a shutdown and could have employees perform certain RIF-related work as an excepted activity.
Agencies subsequently issued about 4,200 RIF notices across several departments and agencies. A federal judge later blocked agencies from issuing or enforcing shutdown-related RIFs while the case proceeded. Those RIF notices were ultimately rescinded, and employees who had been separated were reinstated.
What Does the Settlement Change?
The settlement formally states that the OMB lapse memorandum and related OPM guidance “have been rescinded in full and are no longer operative.” Agencies must also remove references to the rescinded guidance from their websites.
More importantly, agencies must remove language from their current shutdown contingency plans that would authorize them to initiate RIFs during a funding lapse or have employees administer RIF procedures during the shutdown, unless a statute specifically authorizes that work.
That gives federal employees a clearer picture of what agencies can and cannot rely on when preparing for a future shutdown.
There Is a Notice Requirement for Future Changes
The settlement does not permanently prevent agencies from changing their plans.
If an agency later wants to modify its contingency plan to allow RIF initiation or RIF-related work during a future shutdown, it must provide the plaintiff unions with 30 days’ advance notice and publicly post the revised plan.
The distinction matters. The previous policy moved from guidance to actual RIF notices during a funding lapse. Under the settlement, a similar change to an agency’s shutdown plan would have to be disclosed in advance.
What Does This Mean for Federal Employees?
For employees affected by the 2025 shutdown RIF policy, the settlement does not create a new reinstatement benefit. Those employees had already been reinstated under earlier court orders and legislation.
For everyone else, the immediate takeaway is narrower but important: the shutdown RIF policy used in 2025 is no longer operative, and agencies have to remove it from their current contingency plans. Any future attempt to add similar provisions would require advance notice to the unions involved and public disclosure.
Have Questions About a RIF?
RIF rules can be complicated, especially when they intersect with retirement eligibility, health benefits, leave, and other federal benefits. A Federal Retirement Consultant (FRC®) can help you understand how a potential RIF could affect your federal retirement and benefits.
