H.R. 687 — MERIT Act of 2025

This section cites the Act as the “Modern Employment Reform, Improvement, and Transformation Act of 2025” or the “MERIT Act of 2025” and sets forth the table of contents.

This section repeals 5 U.S.C. §4303, thereby terminating agency authority to reduce in grade or remove federal employees based solely on unacceptable performance (i.e., chapter 43 performance-based actions, which provide a procedural track distinct from chapter 75 adverse actions for misconduct). The repeal does not apply to any such actions commenced before the bill's effective date and includes conforming amendments to eliminate cross-references in related statutory provisions (e.g., 5 U.S.C. §§2302, 4302, 7512, 7701, 9508, 9902; 31 U.S.C. §732).

This section revises the standards and procedures for adverse actions (i.e., removal, suspension for more than 14 days, reduction in grade or pay, or furlough for more than 30 days) against federal employees under 5 U.S.C. §7513 by (1) replacing the prior "cause [that] will promote the efficiency of the service" standard with a preponderance-of-the-evidence determination that the employee's performance or misconduct warrants the action; (2) requiring the deciding official to base the initial decision exclusively on five specified factors (i.e., nature/seriousness of offense and relation to duties; job level/type; past disciplinary record; past work record; mitigating circumstances) with agency review to uphold if supported by substantial evidence; (3) shortening the aggregate period for written notice, employee response, and final decision to 15 business days (from at least 30 days' notice plus not less than 7 days to respond, unless reasonable cause to believe a crime was committed), limiting the response period to 7 business days, and requiring a final written decision with reasons and supporting evidence file within 15 business days of notice; (4) eliminating the prior requirement for a performance improvement plan before any such action; (5) limiting employee rights to written notice of specific reasons, representation by an attorney or other representative, and a written decision (thus removing the prior guaranteed minimum 7-day response opportunity and advance notice absent a crime); (6) shortening the appeal filing deadline to the Merit Systems Protection Board to 10 business days after the action's effective date (from 30 days under 5 U.S.C. §7701); and (7) for employees reduced in grade, requiring pay at the new grade rate, prohibiting administrative leave during any appeal, and providing pay only if the employee reports for duty or uses accrued leave (with no pay/benefits otherwise). The section also shortens timelines under 5 U.S.C. §7515 for agency determination and notification of supervisor discipline for whistleblower retaliation to not more than 7 business days (from 14 days). The amendments apply only to actions commenced on or after the bill's effective date.

This section excludes from negotiated grievance procedures under federal collective bargaining agreements (1) adverse actions under subchapter II of chapter 75 (i.e., removal, suspension for more than 14 days, reduction in grade or pay, or furlough for more than 30 days based on unacceptable performance or conduct); (2) furloughs of more than 30 days by a reduction-in-force (RIF) action under subchapter I of chapter 35; (3) separations by an RIF action under subchapter I of chapter 35; and (4) demotions by an RIF action under subchapter I of chapter 35. (As background, 5 U.S.C. §7121 generally requires such agreements to provide binding arbitration as the exclusive administrative procedure for most employee grievances.) The section also makes conforming changes by (1) striking "the settlement of" in subsection (a)(1); (2) revising subsection (e) to eliminate the prior right to elect between a grievance procedure and a Merit Systems Protection Board appeal for adverse actions and performance-based actions under chapter 75 and to limit remaining references to matters similar to subchapter II of chapter 75; and (3) revising subsection (f) to conform terminology. (Thus, the excluded actions are subject solely to statutory appeals, such as to the Merit Systems Protection Board.)

This section revises disciplinary procedures for career appointees in the Senior Executive Service (SES)—high-level career executives in federal agencies—to facilitate expedited actions for performance or conduct issues. Specifically, the section (1) modifies pay retention upon SES removal by entitling appointees placed under certain subsections to the highest of three specified basic pay rates (previously basic pay retention at prior SES rate) and those placed under another subsection to the rate for the new position; (2) amends SES appraisal system requirements to expressly authorize removal from the SES or, as warranted, from the civil service; (3) expands the definition of "employee" eligible for suspension of 14 days or less under 5 U.S.C. 7501 to include SES career appointees who have completed the one-year SES probationary period or were covered by competitive service adverse action procedures immediately prior to SES appointment (previously limited to competitive service employees not serving probation/trial periods or with one year of continuous employment); (4) replaces cause and procedure standards under 5 U.S.C. 7543 with new requirements, including agency determinations by preponderance of evidence based exclusively on specified factors (e.g., nature/seriousness of offense, employee's job level), agency review for substantial evidence support, aggregate timelines not exceeding 15 business days for notice/response/decision (unless crime suspected; employee response limited to 7 business days), written decisions within 15 business days of notice, representation rights, optional hearings, 10-business-day MSPB appeal window, and an expanded definition of misconduct (i.e., including neglect of duty, malfeasance, or refusal of directed reassignment/transfer); (5) exempts these actions from certain SES reinstatement rights; and (6) makes conforming amendments to related provisions.

This section establishes expedited procedures in new §7514 of title 5, U.S. Code, for agencies to take adverse actions under subchapter II (i.e., removal, suspension for more than 14 days, reduction in grade or pay, furlough of 30 days or less, or debarment) against supervisors (as defined in 5 U.S.C. §7103(a)(10), i.e., employees with authority to hire, direct, assign, promote, reward, transfer, furlough, lay off, recall, suspend, discipline, or adjust pay) upon a preponderance-of-evidence determination that the supervisor's performance or misconduct warrants such action. (As background, subchapter II addresses misconduct-based actions distinct from chapter 43 performance-based actions.) Among other provisions, the section (1) requires initial agency decisions to apply exclusively specified factors, including the offense's nature, seriousness, relation to duties, intent, repetition, and the supervisor's job level and prominence; (2) directs agencies to uphold initial decisions supported by substantial evidence; (3) affords supervisors written notice of specific reasons, representation by an attorney or other representative, and a written final decision; (4) eliminates requirements for performance improvement plans and chapter 43 procedures; (5) limits the aggregate period for notice, response, and decision to 15 business days (with a 7-business-day response period), extendable only if reasonable cause exists to believe a crime punishable by imprisonment occurred, and requires a final written decision with reasons and an evidence file within 15 business days after notice; and (6) for reductions in grade, mandates demotion to a qualified grade that reduces annual pay, immediate application of the new pay rate, prohibition on administrative leave during any appeal (with pay only for reporting to duty or approved use of accrued annual, sick, family medical, military, or court leave), and denial of pay or benefits otherwise. The section also redesignates existing §§7514 and 7515 as §§7516 and 7517, respectively.

This section expands the applicability of adverse action procedures under 5 U.S.C. Subchapter I (currently limited to suspensions for 14 days or less) to also cover furloughs for 14 days or less and emergency furloughs (defined as furloughs due to a lapse in appropriations) of any duration. (As background, chapter 75 of title 5, U.S. Code, governs adverse actions against federal employees, such as suspensions and furloughs, to promote the efficiency of the service while providing due process rights.) It further (1) requires the Office of Personnel Management (OPM) to promulgate regulations within 180 days establishing procedures for general furloughs of 14 days or less—including, to the extent appropriate and practicable, written notice of reasons, representation by an attorney or other representative, and a written decision—and specifying materials to be provided to affected employees and the Merit Systems Protection Board (MSPB) upon request; (2) provides that emergency furloughs require only notice explaining the reasons (as soon as practicable, even if after the furlough), with no other procedures available; and (3) excludes emergency furloughs from Subchapter I procedures, administrative law judge hearings under 5 U.S.C. §7521, and longer adverse actions under Subchapter II. This section also modifies Subchapter II procedures for furloughs exceeding 14 days (previously furloughs of 30 days or less) by (1) requiring OPM to promulgate regulations within 180 days adapting removal procedures under 5 U.S.C. §7513—including notice, opportunity to respond, and representation—to the extent appropriate and practicable, along with materials provided to employees and MSPB upon request; (2) authorizing appeals to MSPB within 10 business days of the furlough's effective date; and (3) excluding emergency furloughs from these procedures. (Thus, agencies gain flexibility for furloughs during appropriations lapses with minimal process, while non-emergency furloughs retain scaled due process based on duration.) It includes conforming amendments to definitions, headings, and tables of contents.

This section establishes a new §8323 in subchapter II of chapter 83, title 5, U.S. Code, excluding "felonious service" from creditable service when calculating annuities under CSRS (subchapter III of chapter 83) or FERS (chapter 84) for a "covered individual" (i.e., a federal civilian employee removed for performance or misconduct, or subject to removal but voluntarily separated beforehand) who is finally convicted of a felony based on acts or omissions in official duties sufficient to support removal under §7513, §7543, or other law. (Felonious service is the agency-determined period beginning when such acts commenced and ending at removal, separation, or cessation; thus, it reduces the individual's total creditable service and annuity amount.) It requires the agency head to provide the individual 15 business days' notice before a final order, an opportunity to respond within 10 business days, and issuance of the final order within 5 business days after a response (or 15 business days after notice if no response), to the maximum extent practicable; individuals may appeal the order to the Merit Systems Protection Board within 10 business days. Agencies must amend and transmit updated retirement records to the Office of Personnel Management within 30 business days of a final agency order or MSPB decision, with OPM recalculating annuities for current annuitants within another 30 business days; individuals receive lump-sum credit attributable to excluded service, and spouses remain eligible for survivor benefits if they fully cooperated with prosecution (as determined by the U.S. Attorney General or a state/territorial/D.C. attorney general).

This section establishes limitations on certain performance-based bonuses and cash awards for federal employees by adding a new subchapter IV to chapter 45 of title 5, United States Code, including §4531 on misconduct. (As background, chapter 45 authorizes agencies to provide performance and cash awards to incentivize federal employee contributions.) The new §4531 does the following: (1) Defines an "adverse finding" as an agency head determination—based on information from an inspector general, senior ethics official, or the Comptroller General—that an employee violated an agency policy warranting removal or suspension for at least 14 days, or violated a law punishable by imprisonment for more than one year; (2) Prohibits an agency head from awarding a "bonus" (i.e., any performance award or cash award under 5 U.S.C. §§4505a, 5384, or 5754) to an employee for five years after the fiscal year of an adverse finding; (3) For bonuses awarded after enactment, requires repayment—after notice and a hearing under chapter 75 procedures—if an adverse finding occurs in the award fiscal year, with repayment via an agency-approved plan and employee certification of compliance as a condition of receipt; (4) Allows appeals of ineligibility or repayment orders to the Merit Systems Protection Board under 5 U.S.C. §7701; and (5) Authorizes agency heads (as defined in 5 U.S.C. §551) to promulgate implementing regulations. The section also makes conforming amendments to the table of sections for chapter 45.

This section extends the probationary period for an initial appointment as a career appointee in the Senior Executive Service (SES)—a personnel system for approximately 7,000 federal executives in leadership positions—to 2 years (from 1 year). It makes a conforming amendment to related SES reduction-in-force provisions and applies prospectively to appointments on or after the bill's effective date.

This section establishes a two-year probationary period under 5 U.S.C. §3321 for appointments in the competitive service and initial appointments as supervisors or managers (previously one year under Office of Personnel Management regulation), with the period for positions requiring formal training (i.e., agency-required program to perform duties) ending two years after training completion and for positions requiring a license (i.e., certification or permission) ending two years after appointment or license issuance, whichever is later. (Thus, agencies may more thoroughly assess new hires' performance before granting permanent status.) It further directs agency heads to (1) disclose probationary terms, including training or licensing, in job announcements and offers; (2) provide timely notice of performance requirements; (3) notify supervisors of probation end dates at one year, six months, three months, and 30 days prior; and (4) certify to the President any decision to retain the employee post-probation, with a brief statement. This section also revises the definitions of covered "employee" under adverse action procedures (5 U.S.C. §§7501, 7511) to require two years (from one year) of current continuous service, limiting such protections to post-probationary employees. (The amendments apply to appointments and continuous service commencing after the effective date in section 12 of the bill.)

This section (1) sets a general effective date for the amendments made by the Act of one year after the date of enactment (unless otherwise specified in the Act); (2) provides that the procedures established or amended by the Act supersede any inconsistent collective bargaining agreement, notwithstanding any other provision of law; and (3) defines "business day" for purposes of the Act and its amendments as any day other than a Saturday, Sunday, or legal public holiday under 5 U.S.C. § 6103(a).