H.R. 201 — Federal Employee Performance and Accountability Act of 2025

This section defines terms used in the Act, including (1) Director as the Director of the Office of Management and Budget; (2) eligible employee as an Executive agency employee (i.e., an Executive department, Government corporation, or independent establishment) in a GS-11 through GS-15 position or senior-level position (i.e., above GS-15) that has clearly measurable performance criteria (e.g., project management, administrative or policy analysis, information technology, finance, or procurement specialist, leadership, customer service representative, or claims processor); (3) Executive agency as having the meaning given in 5 U.S.C. §105; (4) participating agency as an Executive agency with one or more participating employees; (5) participating employee as an eligible employee who participates in the pilot program established under section 3(a); (6) performance metrics as agency-specific standards for participating employees measuring productivity (e.g., completed cases per quarter), quality (e.g., accuracy and customer satisfaction), or timeliness (e.g., processing deadlines); and (7) Program as the pilot program established under section 3(a).

This section directs the Director to carry out a five-year pilot program, beginning 180 days after enactment, to establish a performance-based pay structure for participating federal employees. The head of each Executive agency must ensure that 1-10% of eligible employees participate, unless the agency head opts out due to risks to national security or public safety and submits a written justification to the Director.

This section requires participating agencies to (1) establish annual performance metrics for each participating employee related to core functions and public service delivery, focusing on productivity, quality, and timeliness; (2) implement a standardized, objective performance evaluation system established by the Director that includes periodic reviews of participating employee performance; and (3) provide training and resources to support participating employees in understanding and meeting performance metrics, including an introductory training course and quarterly performance feedback sessions.

This section establishes a tiered annual performance-based pay adjustment system for participating employees, effective the first day of the first applicable pay period beginning on or after the first day of the second year of the Program and each year thereafter, which replaces eligibility for annual pay adjustments (under 5 U.S.C. §§5303, 5304, or 5304a), within-grade step increases (under §§5335 or 5336), recruitment/retention/relocation bonuses (under §5753), supervisory differential payments (under §5754), and performance awards (under §5384). Under the system—(1) Tier 1 employees (significantly exceeding metrics) receive a basic pay increase of not more than 10%; (2) Tier 2 employees (meeting metrics) receive no pay adjustment; and (3) Tier 3 employees (below metrics) receive a 10% basic pay reduction plus training or development opportunities. Agency heads may also award discretionary bonuses to Tier 1 employees and provide non-monetary benefits (e.g., flexible scheduling, telework, technology upgrades, or parking) to Tier 1 or Tier 2 employees.

This section establishes annual reporting requirements for participating agencies in the Program, requiring submission to the Director of the Office of Management and Budget (OMB) of quantitative data on cost savings, efficiency gains, and productivity metrics, as well as qualitative examples of impacts on public service outcomes and employee satisfaction. It further directs the OMB Director to review agency reports and recommend adjustments, conduct annual Program assessments on productivity, budgetary impact, and employee satisfaction, and submit related reports to Congress. Finally, it requires the Comptroller General of the United States and OMB Director, not later than one year after Program termination, to jointly assess and report to Congress on the Program's impacts on productivity, budgets, and employee engagement.

This section authorizes no additional appropriations to carry out the Act and requires the Office of Management and Budget, Government Accountability Office, and participating agencies to carry out their duties using existing funds.